New York To Offer Legal Aid To Struggling Homeowners

Struggling homeowners facing foreclosure often need legal advice but find themselves in such dire financial straits, they don't think they can afford it.

But homeowners in New York state facing foreclosure are getting a break: New York Attorney General Eric Schneiderman says his office is spending $1 million to establish legal aid services for residents in danger of losing their homes.

“As our state faces another tight budget year, we must be creative and aggressive in our efforts to support working families who are struggling to stay in their homes,” Schneiderman said. “This funding will provide thousands of New Yorkers with the legal expertise they desperately need to defend their rights and avoid falling prey to unscrupulous mortgage servicers or foreclosure mill law firms filing fabricated or robosigned documents.

One in 10 mortgages at risk

Though foreclosures are down nationwide, Schneiderman says it's still a serious problem in New York. Statewide, an average of 1 in 10 mortgages is at risk of foreclosure, he says. The approximate number of individuals living in homes that are either in foreclosure or at risk of foreclosure, based on typical household size for each distressed mortgage, exceeds the populations of Buffalo, Rochester, and Syracuse combined

In many cases, stressed-out homeowners find loan servicers misleading or unresponsive. Over and over they report working toward a loan modification, only to be suddenly told their home has been placed in foreclosure. Having legal assistance will increase their odds of cutting through the red tape, Schneiderman says.

While New York has the money in place, it has not yet set up the infrastructure for dealing with homeowners. Schneiderman said his office last week issued a Request for Applications (RFA) seeking bids from non-profit legal services and legal aid organizations to provide direct legal services to homeowners in foreclosure or at imminent risk of foreclosure.