UM's Foreclosure Fellowship Program Gets National Attention

It's nice to see a good idea reach fruition, as is the case with UM Law Professor Michael Froomkin's Foreclosure Fellowships, which received national attention in this Time article:

That specter of judicial paralysis helped spur UM law professor Michael Froomkin to create the foreclosure defense program. It places fledgling attorneys like Paschal with legal aid service organizations to help tackle the backlog of cases — more than 50,000 foreclosure filings so far this year in Miami-Dade County alone. Many homeowners don't know what legal defenses are available to them as they battle lenders to keep their properties — or at least make foreclosure less painful, and costly. "Potentially, one of the most significant [defenses] is that the lender, because so many home loans were securitized during the housing boom, often doesn't even know who owns the mortgage anymore," says Froomkin. That, he adds, could throw into question the lender's right to bring the foreclosure case in the first place.

Carolina Lombardi, senior attorney at Legal Services of Greater Miami Inc., which is mentoring some of the UM fellows, says foreclosure defendants also need attorneys to help them fend off all too frequent lender practices such as exorbitant escrow claims. "Homeowners who have lawyers are usually prevailing in those cases," says Lombardi. But she notes that unless homeowners fall below the federal poverty line ($22,000 for a family of four), they can't qualify for the free legal aid that agencies like hers provide. That creates an obstacle for most foreclosure defendants, who aren't impoverished but, due to job loss and other circumstances that brought them to the brink of losing their home, often can't afford a lawyer.

Another impediment is foreclosure law itself, a bureaucratically convoluted field worthy of a Dickens novel. "It's a labor-intensive area of practice," says Paschal. "It involves a ton of paperwork." Yet another is the relatively low pay attorneys usually reap from defending foreclosure clients. Melanca Clark, counsel at the Brennan Center and co-author of this month's study, urges Congress and state legislatures to create incentives, like more funding for foreclosure legal representation, that "level the playing field" against lenders and their comparatively well paid lawyers. Restrictions on government funding for legal services should be relaxed, she says, especially rules that don't let victorious foreclosure defendants collect attorney fees, as prevailing parties in most other kinds of civil litigation do. "We need structural reforms as badly as we need more [foreclosure defense] lawyers," says Clark.

The Professor also points to this NYT article from Saturday on how some judges are holding banks' feet to the fire on producing the underlying mortgage documents, which in one case led a federal judge to dismiss a claim based on a securitized mortgage where the alleged assignee could not provide proof that it owned the underlying note, effectively wiping out a $461k debt.

I'm fine with all that, provided the Judge who dismissed the case did so without the slightest hint of compassion.