Bank of America Settlement and the Need for Legal Aid Lawyers

Unnecessary foreclosures could be avoided by equal access to civil legal aid lawyers.

Blog Post (NATIONAL)

Julia Gordon, Sarah Edelman
November 30, 2014
Link to story

Tags: Consumer Protection, Funding: Federal, Funding: State & Local, Housing: Foreclosure, Public Benefits

Organizations mentioned/involved: Center for Responsible Lending (CRL), National Housing Resource Center (NHRC)


Last week, Bank of America reached a record-setting $16.65 billion settlement with the Department of Justice for selling toxic mortgage securities during the housing boom.

The agreement includes $30 million for states to distribute to their legal aid programs. This is encouraging news for the 1.75 million homeowners who are still in default on their mortgages, as well as the 9.5 million borrowers who are underwater and at risk of foreclosure.  But it’s not enough.

One of the best ways to prevent unnecessary foreclosures is to provide struggling families with a legal aid lawyer.  While the state guarantees legal representation for any criminal proceeding, there is no such guarantee in civil cases.

Therefore, access to fair representation depends largely on the availability of free legal aid lawyers who have a long track record of helping people with no other options—such as battered spouses, people with disabilities, parents seeking child support, homeless veterans, and others without means.