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Carl Rauscher
Director of Media Relations
202.295.1615
rauscherc@lsc.gov

 

Housing Bill to Provide Grants for Legal Counseling

Tuesday, July 29, 2008

July 29, 2008

FOR IMMEDIATE RELEASE

Washington, DC--The housing bill approved by the Congress will bolster efforts by legal aid programs funded by the Legal Services Corporation to help low-income Americans worried that they may lose their homes through foreclosure.

The bill, the Housing and Economic Recovery Act of 2008, provides $30 million for pre-foreclosure and legal counseling through a new grant program.

"Because of the enormous impact that the subprime mortgage crisis is having on the poor, particularly the elderly on fixed incomes and low-income renters, legal assistance is a crucial and necessary component in the effort to address the crisis," Helaine M. Barnett, president of LSC, said.

"Foreclosure cases are complex and time consuming, and legal aid attorneys funded by LSC often are the only resort for low-income individuals and families. We expect requests for legal assistance to continue to grow, and, without additional funding, our programs will be unable to meet that demand."

The Legal Services Corporation is a congressionally funded nonprofit organization dedicated to promoting equal access to justice in our nation and to providing high-quality civil legal assistance to low-income persons. LSC currently funds 137 civil legal aid programs with more than 920 offices across the country.

LSC-funded programs report that many of their legal aid offices could see twice as many requests for help in the coming year compared to past years. Many low-income individuals worried about losing their homes call LSC programs to complain they were targeted by predatory lenders, have lost a job, have become disabled or have lost a spouse and spousal income. LSC has asked its programs to begin collecting data on requests from eligible clients seeking to avert a home foreclosure.

Under the housing bill, the Neighborhood Reinvestment Corporation, a congressionally charted nonprofit that does business as NeighborWorks America, will make grants to housing counselors "to hire attorneys to assist homeowners who have legal issues directly related to the homeowner's foreclosure, delinquency or short sale." No funds may be used for "legal representation involving or for the purpose of civil litigation," according to the bill.

"Homeowners who are struggling with their mortgages and seeking mortgage counseling may also need legal services. We're pleased that the Congress has appropriated $30 million to help qualified homeowners in distress access the important legal help that they may need," said Kenneth D. Wade, chief executive officer of NeighborWorks.