Legal Fraternity in Virginia Trying to Contain Foreclosures

November 18th, 2008 | Tags: Foreclosures

Virginia is in the grip of a foreclosure crisis that is showing no signs of slowing down. The legal fraternity of Virginia is trying to contain the foreclosure menace so that people can continue to stay in the houses that are their homes.

In November will be held the annual legal aid conference of The Virginia Poverty Law Center. Three of its sessions will focus entirely on the foreclosure problem. In July, The Southwest Virginia Legal Aid Society had started a counseling programme in tandem with consumer law experts and housing advocates. The Legal Services of Northern Virginia are mulling over new measures dealing with the problem of foreclosures harassing the Hispanic community.

People are so distressed by foreclosures and there are so many seeking help that a new group of professionals have debuted who are charging fees for their services in matters of foreclosure assistance.

John C. McCain of George Mason University warns that people should not be complacent about early relief. Foreclosures were rising and “it’s not turning off yet,” he added.

Larry Harley of Southwest Virginia Legal Aid Society said the helping of the foreclosure victims consist of three steps. In the beginning counseling is required. It is necessary to find out what the income level is and if it allows for regular payment of mortgage dues even if reduced or if any trimmings can be made in expenditure. The borrower needs to be counseled about the importance of budgeting. The second step consists of contacting the lender and to find out how much the bank is willing to come forward to solve the problem. Here there are many alternatives. The bank may reduce interest, waive part of the principal loan or extend the life of the loan. If the first two steps fail then the lawyers can get involved in throwing a legal challenge at court to the lender. There are 14 lawyers waiting under the Southwest Virginia programme ready to take up the gauntlet.

One of the most powerful legal tools is to scrutinize the loan documents said Jay Speer of Virginia Poverty Law Center based in Richmond. He said, “If the homeowners have refinanced within three years, you look for Truth in Lending Act violations.” Usually the lenders “were so busy sucking in the money they didn’t pay attention to the details.” Under such circumstances the loan can be rescinded and the foreclosure stopped.