Justice Center Testifies at NY State Assembly Foreclosure Hearings

Lynn Armentrout, the director of the City Bar Justice Center’s Foreclosure Project, testified yesterday at a New York State Assembly public hearing on the “Impact of the Mortgage Foreclosure Process and Crisis.”

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“Providing legal services to homeowners in foreclosure is fundamentally important not only because of the help provided to the individual homeowners and their families, but because saving homes from foreclosure protects the larger community and economy from the destabilizing influence of large numbers of vacant and foreclosed homes,” Armentrout stated in her testimony submitted to the Assembly’s Standing Committees on Judiciary, Housing and Banks.

While expressing appreciation that funding from the Housing Trust Fund makes legal services available to many homeowners, Armentrout said the funding should not be limited to homeowners with subprime loans. That’s because of the changing profile of the typical foreclosure client. While 97 out of the 100 cases that the Justice Center handled in the nine months between June 2008 and March 2009 involved subprime loans, in 2010 less than one-third are related to the subprime lending problem. Now most of the clients are in foreclosure because they’ve lost jobs or businesses.

“The foreclosure crisis is no longer a subprime lending crisis but an economic one. The majority of the clients we now see are victims not of predatory lending but of a sour economy,” Armentrout said.

Read the full submitted testimony here. (PDF)