Legal Services NYC Calls for Restoration of Critical Foreclosure Funding in 2012 State Budget

New York, NY, March 18, 2011—Legal Services NYC today joined Senator Jeff Klein, Senator Gustavo Rivera, and Assemblymember Michael Benedetto in urging the New York
State legislature to include $15 million in the 2011-12 proposed Budget
for the Division of Housing and Community Renewal’s Foreclosure
Prevention Services Program, which funds advocates to assist New York
homeowners at risk of losing their homes to foreclosure.  Without
continued funding, many programs around the state will shut down this
year.

“Without the assistance made possible by the Foreclosure Prevention Services Program, many homeowners will be unable to obtain affordable modifications or will needlessly lose their homes to foreclosure,” said Meghan Faux, Director of the Foreclosure Prevention Project at South Brooklyn Legal Services, a program of Legal Services NYC.  “We know that many homeowners try to work with their lender for more than a year and are erroneously denied modifications when trying to negotiate on their own.” 

The DHCR program, launched in 2008, funded over 120 organizations across the state to provide foreclosure prevention services.  To date, these organizations have helped homeowners in more than 43,000 interventions.

Best estimates predict that we are just one third of the way through the foreclosure crisis, making it critical that New York continue to fight foreclosures aggressively. The numbers are staggering. Last year, more than 250,000 pre-foreclosure notices were mailed to homeowners while more than 77,000 foreclosures were still pending statewide. Many of the 77,000 foreclosure actions should never have been filed. A substantial increase in foreclosure filings is expected later this year just as programs are closing their doors.

“These foreclosures don’t need to happen,” according to Margaret Becker, Director of Staten Island Legal Services’ Homeowner Defense Project. “Banks are senselessly blocking reasonable loan modifications. Without advocates for homeowners, banks will get away with it.”

LS-NYC defends homeowners in foreclosure actions, represents them in settlement conferences, negotiates successful loan modifications and provides a wide range of legal assistance. LS-NYC attorneys have also trained approximately 1,000 pro bono lawyers and provide ongoing support to increase the availability of legal representation. Last year, LSNYC assisted more than 2,500 homeowners at risk of losing their homes; without Foreclosure Prevention Services funding LSNYC will have to turn away more than 1,000 homeowners each year.  The impact of this funding cut will reach far beyond individual clients. Many of the communities we work in have multiple foreclosures on each block, which continues the cycle of declining neighborhoods and decreasing property values.

Legal Services NYC strongly urges the New York State Legislature to amend the proposed Budget to include an allocation of $15 million, so that critical foreclosure prevention services can be maintained in every county of the state.

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