Bank Foreclosure Cases Overwhelm Legal System

by Peter Vernon on Foreclosure Help

The increasing number of bank foreclosure cases is clogging the courtrooms in several areas in the country. The pileup of foreclosure cases is partly due to the shortage of lawyers who are experienced enough to take the cudgels for the thousands of distressed homeowners who need help to save their properties from foreclosures.

To address the growing shortage of legal aid services, advocates have appealed for reforms at the state and federal level to allow expanded legal services to homeowners who cannot afford to hire lawyers of their own.

And it seems that the proposal is gaining some support in Maryland. Already, Governor Martin O’Malley has introduced a legislation that makes mediation mandatory. This means that all mortgage lenders will be required to participate in negotiations that would result to affordable loan terms for distressed homeowners and make foreclosure the last resort.

Aside from making it mandatory for all bank foreclosure cases to go through mediation first, O’Malley also wants mortgage lenders to pay for all the costs related to the case. For the first nine months of this year, the number of households in Anne Arundel County that received at least one foreclosure filing reached an all time high compared with same period last year.

Market data showed that in September, there were 276 repossession cases, a slight drop from the previous month’s 298 but far higher from the total figures for September of 2008 and 2007. On a year-to-year basis, the total number of foreclosure filings in the county is about 2,300. And industry experts are predicting that the number of foreclosure cases will hit over 3,000 by the end of this year.

Experts said that majority of homeowners who are in some stage of foreclosure proceedings in the county does not have court representation. They added that the trend is logical because if troubled homeowners could not afford to pay their monthly mortgages, it follows that they could not also afford to hire a lawyer to help them.

The Maryland Legal Aid Bureau staff members said that the nonprofit law firm is seeing a 64 percent rise in the number of foreclosure cases that it handled for several months now. Staff members pointed out that there is a growing need for legal services from homeowners facing the threat of bank foreclosure. However, they said that the law firm could only help homeowners who meet certain requirements.