More volunteer lawyers are being recruited by the New York City Bar Justice Center and the Federal Reserve Bank of New York to help reduce foreclosed housing inventories across the city.
This week, members of the Lawyers’ Foreclosure Intervention Network gathered to mark their first year of operation and to discuss ways to encourage more lawyers to join the network, particularly attorneys from big firms.
Volunteer lawyers typically help homeowners protect their houses from getting added to foreclosed housing inventories by negotiating with banks to reduce monthly loan payments.
During the program’s first year, the network has interviewed nearly 130 homeowners at risk of foreclosed housing listing in New York’s five boroughs, with most borrowers coming from Queens, Brooklyn and the Bronx. Volunteer lawyers have processed 80 of the cases, which usually involved primary loans and refinances.
The biggest part of the program’s funding comes from the Federal Reserve Bank. The City Bar Center, on the other hand, provides office space and other materials. The bar also offers free training sessions on foreclosure negotiations and 12 counts of continuing education credits. In exchange for the credits, the lawyers represent distressed homeowners on a pro bono basis.
In June last year, about 125 lawyers enrolled in the program. The following October, 248 lawyers took the course. This June, only 40 so far have enrolled for the training session, according to the network’s director Lynn Armentrout. She said enrollment dropped probably because of the perception that foreclosed housing inventories are declining.
Only two middle-sized law firms have joined the program: the firm Golenbock Eiseman Assor Bell & Peskoe and the firm Kasowitz Benson Torres & Friedman. Among the largest firms, only Orrick Herrington & Sutcliffe has contributed lawyers.
Armentrout contended that large firms are not joining the program because they are protecting the position of banks and other financial institutions, which are among their biggest clients.
Michael Campbell, a top executive at the Federal Reserve Bank, said one of the remedies that could be taken up is the recruitment of banks’ in-house lawyers. One bank’s in-house lawyer could represent a homeowner who took out a loan from another bank.
Another is some kind of anonymity for large law firms participating in the network.
Campbell related that the network plans to visit large law firms and discuss with them how they can overcome the positional conflicts and help in the reduction of foreclosed housing inventories across the city.
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