The number of hard-case stories Elizabeth Tong and Richard Tettelbaum have heard are as impressive as their content is depressing. As two of the Mid-Shore Pro Bono attorney volunteers who participate in the Foreclosure Prevention Project, Tong and Tettelbaum have been present during the worst of the housing crisis. Even as the economy begins to lurch back toward recovery, there are no shortage of clients.
“We’re here to help them save their house if at all possible,” Tong said.
Whether it is possible depends upon variables ranging from a homeowner’s willingness to participate to strokes of good and bad luck. The trick for the volunteers is to try to hold onto the successes and advocate for people to take a more active part in their financial lives before it is too late.
Homeowners tend to be up against a lot as they begin the foreclosure process, and the longer they wait to get legal help, the further behind the curve they will be.
Persnickety Banking Rules
At the height of the mortgage crisis, the most widely reported foreclosures were those related to financial chicanery on the part of lending institutions. Toxic assets and balloon payments on overvalued homes dominated the national conversation. It wasn’t until the foreclosures and evictions started that faces were associated with the phrase predatory lending. And the faces didn’t belong to bankers.
Tettelbaum doesn’t recall the period or the bank tactics fondly.
Banks, especially the larger ones, don’t tend to act in good faith once the foreclosure process begins. Faxes tend to disappear or be misdirected; opaque practices, which can vary from bank to bank, may undo months of work by homeowners acting who believe they have been following the rules. While the situation hasn’t changed much, the financial crisis solidified in Tettelbaum the nature of dealing with hardship foreclosures.
“It’s us against horrible bureaucratic forces,” he said.
Many of the local banks were, and are, easier to work with for people facing foreclosure, according to Tettelbaum.
“These banks have the loans right there,” he said. “They aren’t bundled.”
Local banks often are more interested in finding a settlement than repossessing the house.
Tong said if a client has a loan with a community bank, she can pick up the phone and talk to someone who can make a decision. When dealing with the larger banks, the lawyers rarely get to speak with someone at the bank until they reach the courtroom. By then, there is sometimes little that can be done.
Jessica Smith-Harper, foreclosure program coordinator, said Mid-Shore Pro Bono works closely with consumer credit advocates to help people restructure their debt whenever possible.
While there were and remain people who took loans they couldn’t afford, there were a fair number who were sick or out of work at the wrong time and became swept up in the collapse.
“There were people who had mortgages appropriate to their income,” Tong said. “They lived within their means, they did everything right. Then they lost their job.”
“And the next week, their wife got cancer,” Tettelbaum said.
Dealing with so many different people who had so many different reasons for ending up in foreclosure has centered the two. Their focus is on helping people make the best financial decisions given the circumstances.
Too Little, Too Late
Last year, Mid-Shore Pro Bono — which provides access to free counsel for many different court actions — had 80 attorneys who volunteered more than 3,500 hours of free representation, according to executive director Sandy Brown.
Tong and Tettelbaum spend every Tuesday morning holding foreclosure clinics. The meetings are individual consultations with people dealing with foreclosure, and as the recession winds down, the stories get more desperate.
Many of the people in the best shape before the financial crisis, those who were independent contractors or fixed-income seniors, have run through all their savings and now are faced with losing their homes.
Very expensive medical bills or unexpected unemployment can put even the sustainably employed just far enough behind that they will never catch up.
Tong said too many people who could have been saved by bankruptcy elected instead to try to keep paying every debt, long after it was economically feasible.
These are the people Tong and Tettelbaum often see now. Those who held out the longest against foreclosure.
“A lot of times, by the time they come to us, there isn’t much we can do,” she said.
Advocates for Advocacy
Mid-Shore Pro Bono works with the people who can least afford to proceed without counsel. Even though sometimes people come to them too late, there is always a chance they can help save the house, or at least reduce the pain from losing it.
In some cases, people could find a way to stay in the house, but the cost would be so high that the most rational thing to do is start over from scratch. The nonprofit also offers bankruptcy help and advice, and it’s something that can be used hand-in-hand with the foreclosure process.
Sometimes it can help save the home, sometimes it can demonstrate the benefits of not trying to save it.
“We see people at some of the worst moments of their lives,” Tong said. “They’re getting divorced, maybe there are child-custody issues, or they have lost their business. There’s a lot of cross-pollination here.”
Besides trying to raise awareness about the services they offer, the staff and volunteers regularly remind the community the service they provide is rare, meets a specific need and is woefully under-funded.
Tong said lawyers who can’t donate time can still get pro bono hours by donating money. Mid-Shore Pro Bono serves people from all over the region, not just Talbot County residents. She and Tettelbaum encourage donations from the general public on www.midshoreprobono.org.
For her part, Brown would be happy with any donations at all. “People can drop off a package a paper, window envelopes, anything,” she said.