Study: Many go through foreclosure without legal help

The vast majority of people in Nassau County who default on their subprime loans go through the foreclosure process without legal representation, according to a New York University study on foreclosures released this week.

The lack of legal help puts homeowners at a disadvantage, since most laypeople don't know how to negotiate better loan terms or discern whether their lender operated legally, said Melanca Clark of the Brennan Center for Justice at the university, who co-authored the study.

"If lenders think there's going to be no one on the other side, they can act with impunity," Clark said.

During a six-month period ending in May 2009, 92 percent of the people who had subprime loans and were facing foreclosure on their homes in Nassau County did not have legal representation, the study found.

Clark said she believes the number is similar for Suffolk County.

However, a new program there instituted in May provides free legal help at every foreclosure settlement hearing, although not legal representation for the entirety of the case.

About 80 lawyers volunteer their services for the Pro Bono Foreclosure Project in Suffolk County, a service of the Suffolk County Bar Association that provides lawyers for homeowners in foreclosure during every court settlement conference with lenders.

"People need some form of legal representation," said Barry Smolowitz, a Kings Park attorney and coordinator of the program. On their own, he said, "they will not know how to negotiate what they're looking for."

Nassau County's bar association holds free monthly mortgage foreclosure clinics, although its lawyers only explain terms and give referrals, but do not give legal advice.

Jeffrey Siegel, executive director of Nassau/Suffolk Law Services, which provides free legal assistance to the disadvantaged on Long Island, said his office has received hundreds of calls to its Foreclosure Prevention Project this year.

"The need is so overwhelming," he said.

Many of the cases have been turned away, either because the caller made too much money to qualify for help, or because the homeowner had no income and wouldn't have been able to afford to pay back even a modified loan to the lender that attorneys could negotiate for them, Siegel said.

He said the project's four attorneys are representing homeowners in about 100 cases, and he's not sure how many more they can take on.

"If we haven't turned anyone away yet, it's only a matter of time," Siegel said.

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