Legal Aid is pleased to announce that it recently received a grant from the District of Columbia Bar Foundation that will help D.C. residents avoid unnecessary foreclosure. The funds—which will support a joint project of Legal Aid and Legal Counsel for the Elderly—came to the D.C. Bar Foundation as part of a 2014 settlement agreement between the U.S. Department of Justice and Bank of America related to mortgages the bank offered to consumers prior to the financial meltdown.
The funding comes at an opportune moment for District residents threatened with foreclosure.
A significant shift has recently taken place in the way banks are pursuing foreclosures in the District. Historically, the large majority of foreclosures in D.C. took place outside the court system; these “non-judicial” actions were conducted pursuant to the power of sale clause in a deed of trust. Since 2013, however, many more lenders have been choosing to file complaints seeking foreclosure in D.C. Superior Court, rather than going through the administrative process established for these purposes.
As readers of this blog may be aware, Legal Aid and LCE were appointed amici curiae in two of the earliest judicial foreclosure cases handled in D.C. Superior Court before the new procedures went into effect. We took the position that lenders should not be able to simply circumvent the consumer protections in the administrative mediation process and that the court should exercise its equitable discretion to protect consumers in what otherwise could be a rubber-stamp proceeding. An extraordinary collaboration ensued, in which we worked with lenders, advocates, and the Office of the Attorney General to create fair procedures for processing the influx of judicial foreclosure cases.
A new judicial foreclosure calendar was created as a result; the calendar, overseen by Judith Bartnoff, Presiding Judge of the Civil Division, and Magistrate Judge Joseph Beshouri, is regularly attended by Legal Aid and LCE. These attorneys, including Legal Aid’s Equal Justice Works fellow, Jenny Joseph, are in court every week for the call of the calendar, at-the-ready to provide information and assistance to unrepresented homeowners facing foreclosure. Through her fellowship project, sponsored by Akin Gump, Jenny represents homeowners in mediation with their lenders, helping them save their homes through loan modifications and other alternatives to foreclosure. Jenny also conducts outreach and has created a number of training materials to educate homeowners on the new foreclosure process.
The new procedures, combined with the availability of on-site legal services attorneys, have given hundreds of distressed homeowners—who otherwise would have likely lost their homes through default—a meaningful opportunity to explore alternatives to foreclosure, such as loan modifications and short sales, as the first step in the case.
We are grateful for the D.C. Bar Foundation’s support for this important joint project. It is our hope that we will be able to build upon the success of this project in the coming year.