Innovative, New Public Policies that Work to Protect Homeowners

Map of Foreclosures in Baltimore, 2006-2007 (Source: NPR)

For low and middle-income Americans, the last few weeks have been gloomy, especially given that more states have jumped onto the anti-collective bargaining bandwagon initiated by Governor Scott Walker of Wisconsin, whose vision may preclude many from gaining access to affordable housing.  Amidst this climate, the foreclosure crisis continues to ravage communities, as thousands of vacant properties remain in Baltimore alone.

Here, however, we present two potentially innovative new policy proposals that have surfaced in recent weeks, both of which could indeed encourage access to affordable housing.  The first is the New York’s proposal to provide an attorney to each of the state’s 80,000 foreclosure victims.  While the right of a criminal defendant to retain a lawyer has remained an integral part of the American legal fabric for decades, The Empire State’s idea would (perhaps) mark the first time in history where defendants in civil matters can gain access to counsel, free of charge.

Interestingly, this idea didn’t originate from the state’s legislature; rather, New York’s Chief Judge, Jonathan Lippman, was behind the proposal.  To back up this idea, legally speaking, Judge Lippman cited the landmark 1963 Supreme Court decision, Gideon v. Wainwright, which held that states are obligated to provide counsel to all criminal defendants.  Lippman said that this was the right moment to extend this provision, reasoning that “today it is an equally obvious truth that people in civil cases dealing with the necessities of life can’t get a fair day in court without a lawyer.”

The proposal makes sense for a number of reasons.  For one, as the Times points out, because of the recent revelations that several of the country’s most prominent banks had used “improper” methods to accelerate the foreclosure process, the court have increasingly become a the pivotal battle field for the fight between victims and banks.  Access to counsel, even if it’s minimal, could make a tremendous difference for foreclosed families, as “simply responding to a foreclosure notice in court” could delay the process for months.  Furthermore, the idea would certainly enhance courtroom efficiency, as lawyers would be able to both advocate and settle on behalf of clients, making sure that cases move through the courts during this overburdened time.

The Times doesn’t mention the more far-reaching effects of this proposal.  By keeping families in their homes—potentially for years after the initial notice of foreclosure—they continue to pay their utilities bills, maintain their yards, make necessary fix-ups, and so forth.  This would increase property values throughout neighborhoods, delivering more wealth and spending power to nearby families, which would help strengthen the economy.  The idea, in this sense, serves to bolster the work of Max Rameau and Take Back the Land, the subject of our last post.  It would also facilitate Mayor Rawlings-Blake’s strategy “Code Enforcement” strategy to curtail blight, which was mentioned at the city’s recent Vacants to Values Summit.  (And by the way, it would also, I suppose, help alleviate the crumbling legal industry).

The idea is expensive: Judge Lippman has asked the legislature for (an additional) $100 million that could be distributed to legal aid groups and other non-profits, and in a political climate obsessed with savings, his request is no sure bet.  However, given the severe economic effects of letting vacant homes stand—something Baltimore, over the last several decades, has had to learn the hard way—that money should be perceived as an investment with the potential for enormous returns.

It should be noted that Maryland has already taken an important step in the right direction: Last Summer, Governor O’Malley signed the a promising foreclosure mediation bill, giving Maryland families the right to undergo mediation with lenders before they face eviction.  Hopefully, Maryland will follow in the footsteps of New York, by taking the additional measure of ensuring legal services.

Here at St. Ambrose, we take pride in the fact that we retain a skilled and dedicated group of legal services professionals, who have help countless Baltimore families stave off foreclosure and retain their homes.  I hope that other members of the judiciary, as well as legislators around the country, will follow Judge Lippman’s lead and adopt the notion that adequate housing is a “necessity of life,” and that indigent foreclosure victims deserve representation.

On Thursday, I will discuss the new mortgage modification demands sought by states attorneys general.

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