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Legal aid seldom used in foreclosure cases

0 Comments 19 November 2009

Legal aid seldom used in foreclosure cases

By Evan R. Wexler

Pierre Morel, a Queens homeowner with $245,000 in mortgage debt, keeps his stretch-marked leather briefcase close at hand. The legal advisers at the Foreclosure Prevention Court Clinic in central Jamaica tell him to. Their flyers for homeowners say in capital letters: “BRING ALL YOUR DOCUMENTS.”

So, Morel, a 51-year-old Haitian immigrant, takes the advice literally. His bag, pregnant with paperwork, went with him to the clinic’s legal aid session last Friday. And for now, the advice he got about its contents, piecemeal though it was, may be the only thing standing between him and foreclosure.

“I’ve been coming by myself because this time I don’t have enough for a lawyer,” he said while standing in line to see an adviser. “But every time I come do this, it’s like a one-day loss.”

At one firm, Morel was told that it would cost $3,500 to have a lawyer accompany him to his Nov. 4 court date. He simply doesn’t have the money, he said, not since his Creole restaurant on Jamaica Ave. was shuttered last July. Now he’s driving a taxi and dealing with his case whenever he gets a chance.

Outside the office of legal aid at the Queens Civil Courthouse on Sutphin Blvd., he greeted a woman cradling a manila envelope like a baby in her arms. “We met a little while ago at another meeting,” Morel said. Then he said hello to another man, whose arms were likewise full of paperwork.

With more than 14,549 foreclosure cases filed since January 2007, Queens is the epicenter of foreclosures in New York City. Morel is among hundreds of Queens homeowners facing foreclosure without a lawyer’s help. According to data from the New York State Unified Court System, 84 percent of Queens County residents who held non-traditional mortgages and faced foreclosure action between November 2008 and May 2009 did not have full legal representation.

Yet nearly every day, they face big law firms for Deutsche Bank, HSBC and the other banks seeking to take over their homes. And there aren’t enough public service lawyers to help them.

Legal aid organizations are overstretched, and many offices turn away more people than they can help, said Susan Gibson O’Gara, the supervising attorney at The Legal Aid Society in Queens. “There is no right to counsel [in a foreclosure action] and we can’t represent them all,” she said.

While it’s not impossible for homeowners to defend themselves against banks, it’s hard to do so when they cannot afford to hire a single lawyer to represent them. They often rely on a patchwork of advice from various legal clinics.

“These cases get complicated and expensive when you have a private lawyer,” said Chip Gray, interim project director of Queens Legal Services, which provides legal advice to many lower-income Jamaica residents facing foreclosure.

“America has created an elaborate legal system and the ticket to admission is legal counsel,” he said. “The court system is not easy to maneuver through.” Some homeowners simply freeze up when they get the foreclosure notice, Gray added.

Jamaica has had more foreclosures than any other neighborhood in the city, with over 617 cases so far this year; the next highest rate is in Queens Village, which had over 390 foreclosures.

Nevertheless, more resources are belatedly cropping up to help people untangle their mortgage messes. The Foreclosure Prevention Court Clinic directs people to resources that can help them with their financial troubles.

Homeowners got additional relief after May 20, when state law to give homeowners an extra 90-day grace period after notice of foreclosure went into effect. Until then, homeowners had only 10 days.

Still, homeowners must be wary of renegotiated terms and refinancing, said Gray of Queens Legal Services; banks and other lenders have not been any more cooperative with homeowners in light of the economic crisis, and some renegotiate more stringent terms to their original loans.

“Predatory lenders change their tactics when the laws change,” he said. “The housing crisis has been a rolling event. It’s a moving target.”

Still, not all residents are victims of abusive or unfair loan terms. Frequently, Queens Legal Services sees cases in which homeowners were not snared into fraudulent lending but, like Morel, stopped making mortgage payments because they lost their jobs or had other loans to pay off.

Morel said that he took his original mortgage out when he bought his home 24 years ago, and refinanced in 2004 and again in 2006. But he doesn’t blame the mortgage company.

“I blame myself,” he said, “but it doesn’t mean I should have to lose my house.”

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