Equal Justice Works Blog

40 Wills in 4 Days: Part 1

equaljusticeworks — Wed, 31 Mar 2010 13:39:01 +0000

On March 7, Equal Justice Works AmeriCorps Senior Program Manager Cole McMahon and Program Manager Marty joined with current Equal Justice Works AmeriCorps Legal Fellows JR LaPlante, Leigh Ferrin, Bethany Hamilton, Anneliese Gryta and 12 University of South Dakota law students for the Initiative for Indian Estate Planning a.k.a. “De-fractionation Tour: 40 wills in 4 days”. This is the first blog in a series written by Marty Costello that follows the group as they tour Indian Reservations in South Dakota drafting Indian wills and performing outreach.

40 Wills in 4 Days: Training

After arriving in Rapid City, on a very foggy Saturday night, we made the Sunday morning drive from Rapid City to the Rosebud Sioux Tribe to meet up with JR LaPlante and the University of South Dakota (USD) law student volunteers.

The first part of the project was a training about American Indian culture, customs, and the problems surrounding keeping Indian lands in Indian hands. It is a problem that none of us, especially those from the East Coast, fully understood before we arrived. Many of the problems stem from the American Indian Probate Reform Act (AIPRA) of 2004. AIPRA, in certain circumstances, provides for a forced sale of individual land trusts when an Indian dies intestate (without a will). Due to the lack of estate planning services, the result is the continued dilution of Indian interest in their own land. After the substantive training, lead by Janet Routzen of the Office of the Special Trustee for American Indians, and Cheryl Three Stars from Dakota Plains Legal Services, we all felt like we were ready to start helping some clients.

The 12 USD law students were some of the most energetic and well-trained law students we have ever seen. It was great to see the commitment of the students who were dedicating their spring break to JR’s project. Although not on the tour, Access to Justice, Inc.’s Carrie Henrichsen’s (Equal Justice Works AmeriCorps Fellow 06-08) impact is obvious. Since 2007, Access to Justice has had an Equal Justice Works AmeriCorps Legal Fellow serving at the USD law school. It is no coincidence USD law students have opportunities like this project, and the enthusiasm to spend a week drafting wills for Indians from all corners of South Dakota.

Carrie was the first Equal Justice Works AmeriCorps Legal Fellow Class Representative. Along on the tour, were the three current representatives: Leigh Ferrin (Public Law Center); Bethany Hamilton (Legal Aid of Western New York); and Anneliese Gryta (Legal Aid of Western of Ohio). The representatives took time from their projects to assist JR with his. That is what a corps does. They did a great job helping the law students with the interviewing process. I really enjoyed getting the opportunity to serve with the Fellows as an attorney rather than my normal role as program manager.

To see the representatives reflect on their Fellowships, click here

-Marty-

Summer Corps Applications Open April 1

equaljusticeworks — Mon, 29 Mar 2010 13:50:29 +0000

The Equal Justice Works Summer Corps program provides law students with the opportunity to engage in qualifying public interest law internships during the summer and earn a $1,000 education award for 300 hours of service. In addition, Summer Corps members can apply to the Equal Justice Works Summer Corps Standouts awards program, designed to highlight the work of Summer Corps members who use their legal skills and creativity to meet the needs of their community in innovative ways. Summer Corps Standouts will have their work featured on the Equal Justice Works blog and are automatically entered into the running to receive the “Exemplary Public Service Award for a Student” at the annual Equal Justice Works Awards Dinner in Washington, DC. Read more about Summer Corps Standout winners at the Equal Justice Works blog.

Applications for the Summer Corps program can be submitted online on the Equal Justice Works website from April 1 through 11:59 PM on April 16. Applicants will be able to complete the entire application online including the signing of the Summer Corps Contract. We are confident that this new process will help applicants and their supervisors to transfer their materials quickly and safely.

Before applying to the Summer Corps program, potential applicants should first review requirements and eligibility guidelines located online at the Summer Corps eligibility page. They should also visit the “Applying to Summer Corps” section of the Equal Justice Works Forum . The Forum will provide helpful tips for the application process, along with FAQs. Students may want to further explore the Forum for information about job opportunities and student debt relief. Questions should be directed to Martin Costello and Jessica Meller at Summer Corps.

Congress Enacts Landmark Student Loan Legislation

equaljusticeworks — Fri, 26 Mar 2010 14:15:05 +0000

Banks and private lenders will no longer earn billions of dollars in profits by originating federal student loans. Congress voted Thursday to move to a direct-lending approach for federal student loans, saving taxpayers an estimated $61 billion over 10 years and directing about $40 billion of the savings to increased Pell Grants and other higher education initiatives. The new legislation is a terrific step, but it doesn’t go far enough. The Pell Grant increase will not keep up with rising tuition costs. ”The increases in the Pell Grant are better than nothing, but they are still quite anemic,” said Mark Kantrowitz, publisher of FinAid.org.

Lobbyists for the banks unsuccessfully argued that the overhaul would eliminate jobs in the student loan industry. However, the government will hire the same student loan companies on contract to service and administer the direct student loans. Republicans unanimously opposed this landmark legislation in both chambers.

Private lenders will still profit from alternative commercial student loans and borrowers are cautioned that these loans have variable interest rates with no cap and less flexible repayment options. Always look to federals grants and loans before considering a private student loan.

Double check payment amounts for IBR

equaljusticeworks — Thu, 25 Mar 2010 17:46:44 +0000

Income-Based Repayment (IBR) will help millions of borrowers reduce their monthly student loan payments with payment caps based on income and family size. But borrowers need to double check that their lenders are calculating their monthly payment amounts correctly. IBR should be based on Adjusted Gross Income, not wages. Adjusted Gross Income includes wages plus certain other income (like interest income) but minus specific deductions (like the student loan interest deduction and IRA contribution deduction). Forbes reports that ACS Education Solutions, the private company that collects payments for the Department of Education’s Direct Loan program, has based some borrower’s repayments on gross income, rather than adjusted gross income, as required by law. I have heard similar complaints from borrowers. Your adjusted gross income is the last figure on the first page of your tax return. I recommend you use one of the online calculators below to make sure you agree with the amount your lender has calculated.

http://www.ibrinfo.org/calculator.php

http://www.finaid.org/calculators/ibr.phtml

http://studentaid.ed.gov/PORTALSWebApp/students/english/IBRCalc.jsp

- Heather -

Student Loans No Easier to Discharge in Bankruptcy

equaljusticeworks — Wed, 24 Mar 2010 17:56:35 +0000

In an unusual and limited case Tuesday, the United States Supreme Court ruled that a student loan lender had waited too long to object to legal errors in a bankruptcy case involving student loans. Student loans are rarely discharged in bankruptcy, and borrowers seeking discharge must prove that the student loan will impose an “undue hardship,” or that the borrower cannot have a minimal standard of living if forced to repay. In the recent case, a lower court confirmed a plan submitted by student loan borrower Francisco Espinosa to repay his principal over five years, after which the court discharged the interest Espinosa would have owed. The court did not apply the required “undue hardship” test. Although Espinosa’s lender, United Student Aid, received notices from the court, the lender did not object or appeal. When the lender later tried to re-open the case, the U.S. Supreme Court ruled that although there were legal errors in the bankruptcy proceeding, the ruling was enforceable because the lender failed to object in time.

Private student loans remain risky, expensive, and next to impossible to discharge in bankruptcy. Equal Justice Works supports efforts to reform the special bankruptcy treatment afforded private student loan companies.

Student Loan Borrower Assistance provides more information on the difficulty of discharging student loans in bankruptcy.

United Student Aid Funds, Inc. v. Espinosa

Bankruptcy Ruling in Student Loan Case, N.Y. Times

Hearing on: An Undue Hardship? Discharging Educational Debt in Bankruptcy, House Judiciary Committee

- Heather -

Immigrant communities targets in loan scams

equaljusticeworks — Tue, 23 Mar 2010 15:39:26 +0000

Another post in Equal Justice Works series on economic recovery in America. Esther Ro is an AmeriCorps Legal Fellow serving at Asian Pacific American Legal Center in Los Angeles, CA. Esther is working with immigrant populations, helping homeowners avoid foreclosure, modify loans and obtain other relief. She recently worked on a case impacting 28 Korean families.

As distressed homeowners try to save their homes, unscrupulous people holding themselves out as loss mitigation and loan modification “specialists” target vulnerable homeowners, promising they will save the home from foreclosure, reduce principal balances, and file lawsuits against the homeowners’ lenders. These foreclosure rescue scams, rather than providing any meaningful assistance, leave homeowners deeper in debt, losing their homes, and losing valuable time that could have been used to work with a legitimate housing counselor, apply for a loan modification or plan and save for a transition plan.

Communities are being inundated with advertisements for paid loan modification services and many turn to these paid services as a final attempt to save their homes. In California, where a large number of homeowners possess adjustable rate mortgages and home values are underwater, the number of foreclosure rescue scams has been alarming. Several government agencies have been working to investigate and stop the scams, including the State Bar of California, the California Office of the Attorney General, and local law enforcement agencies. The California legislature has banned the taking of upfront fees, including by attorneys, for loan modification services.

Immigrant communities remain particularly vulnerable targets for foreclosure rescue scams because of their unfamiliarity with financial systems, and language barriers preventing immigrant homeowners from working directly with their lenders. Furthermore, the language barrier often forces immigrant borrowers to work with middlemen, agents or brokers, who speak their native languages, but charge a fee for their services, while leading the borrower to foreclosure rescue scam businesses. Borrowers often believe that paying for loan modification services, particularly hiring an attorney, will help quicken the loan modification process and achieve better results.

The Asian Pacific American Legal Center of Southern California (“APALC”), a civil rights organization serving Asian Pacific Islander communities, recently filed a lawsuit against a law firm and its attorneys for a “loan litigation” scam that defrauded 28 Korean immigrants out of $240,000 in attorneys’ fees. The case, styled Chae et al. v. Trinity Law Associates, et al., Los Angeles Superior Court Case No. BC 433508, alleges various causes of action including fraud, breach of contract, and statutory violations. The defendants advertised in Korean language newspapers for their “loan litigation” services and used Korean-speaking agents and brokers to bring business to the law firm. After signing retainer agreements with the victims, and taking up front fees between $4,000 and $16,500, the law firm provided either no legal services or poorly executed legal services. The victims suffered damages including the up front retainer fees, loss of property through foreclosure, and emotional distress.

Read more in the Los Angeles Times article and watch ABC 7 coverage.

Bringing Fairness Back to the Foreclosure Process in Washington

equaljusticeworks — Mon, 22 Mar 2010 14:05:24 +0000

Another post in Equal Justice Works series on economic recovery in America. In 2007, an elderly woman who was suffering from Alzheimer’s disease fell behind on her mortgage payments. Even though she had more than $150,000 of equity in her home, and a purchase agreement with a potential buyer, her home was sold at a foreclosure sale, wiping out her entire life savings. Consumer law attorneys at Northwest Justice Project, with the help of Rory O’Sullivan, an Equal Justice Works AmeriCorps Legal Fellow, brought the case to trial in front of a jury.

Washington State is a non-judicial foreclosure state, meaning that a home can be repossessed by a bank without the filing of a court case. However, even without a court case, there are still laws that protect the homeowner.

Washington state law requires that a third party “trustee” (generally a loan servicing company) be entrusted with the responsibility of conducting foreclosure sales in a manner that protects both the bank and the homeowner. If a homeowner is unable to make their payments, the bank notifies the trustee who initiates the foreclosure process. If the homeowner has problems with the bank or there is a reason to postpone the foreclosure sale, the homeowner can contact the trustee who must review the homeowner’s request.

Unfortunately, not all trustees take their duties as seriously as the law requires. In 2006, Dorothy Halstien began suffering from the effects of Alzheimer’s disease. She was appointed a guardian and moved to a care facility. The cost of Dorothy’s medical care was greater than her income, and in 2007 she fell behind on her mortgage payments. While Dorothy did not have much money, she did have more than $150,000 of equity in her home. The guardian made arrangements to sell Dorothy’s home so the money could be used to pay for her medical care. The house was put on the market, a buyer found, and a purchase and sale agreement signed on Dorothy’s behalf. The closing date for the sale of the home was a few weeks after the foreclosure sale was set to take place.

Usually, when a homeowner has a buyer for their home, a trustee will agree to postpone the foreclosure sale. Unfortunately, the trustee in Dorothy’s case refused to postpone the foreclosure sale without the permission of the bank, Washington Mutual, which was in the midst of financial struggles of its own. The result was a perfect storm in which Dorothy’s home was sold at a foreclosure sale for less than one third of its value, and Dorothy lost her life savings.

Had the trustee followed the law and postponed the foreclosure sale, the bank would have been paid in full, the trustee would have received all of its fees, and Dorothy’s guardian would have been able to use the remaining funds to provide for Dorothy’s care. Instead, Dorothy passed away in a care facility funded by Washington state taxpayers.

Northwest Justice Project sued the trustee on behalf of Dorothy for the damages it caused. A jury found that the trustee violated Washington State’s Consumer Protection Act, among other claims, and rendered a verdict for Dorothy’s estate of more than $150,000 in damages. While the money has come too late to help Dorothy, the case serves as a reminder of the laws in place to protect homeowners from illegal practices.

Read the Seattle Times article about this case.

Student Loan Reform Legislation Ends Subsidies to Private Banks

equaljusticeworks — Fri, 19 Mar 2010 15:53:50 +0000

Yesterday, Congressional leaders introduced legislation to shift to direct lending and eliminate the Federal Family Education Loan (FFEL) program. The bill increases spending on Pell Grants and expands the Income-Based Repayment (IBR) program, but only for borrowers who take out their first federal student loan after 2014. Although I am disappointed that the IBR expansion does not apply to current borrowers as proposed by President Obama, IBR will still help huge numbers of borrowers struggling with the burden of student debt. “This legislation offers the most sweeping changes to the federal student loan program in a generation,” said Representative George Miller of California, chairman of the House Education and Labor Committee. “With one move, Congress can make college more affordable, keep jobs in America, prepare young people for our global economy, and reduce our deficit by billions.”

Read the New York Times article.

Read the budget reconciliation bill .

-Heather-

Capturing Campus Culture: Top 10 List for Students Seeking a Law School Environment that Supports Public Service

equaljusticeworks — Thu, 18 Mar 2010 19:33:54 +0000

This is a guest post by Charlene Gomes, Senior Program Manager, Law School Advocacy and Outreach, at Equal Justice Works.

This is the time of year when thousands of aspiring law students are juggling admission letters from various law schools. After almost a year of preparation, the time has come to make a decision. While the stakes have always been high for applicants who seek to attend law school knowing that they wish to pursue a public service career after graduation, they are particularly high in these days of growing tuition costs and scarce employment opportunities.

So much of what is comprises a quality educational experience for future public service attorneys is difficult if not impossible to assess through law school marketing materials. So here’s my “Top 10” list of factors that indicate a school environment that provides good educational opportunities and is supportive of public interest-minded students:

A dedicated administrator to support public interest initiatives AND a dedicated career counselor who is knowledgeable about public service careers in nonprofits, government, and postgraduate fellowships.
Cross-curricular offerings that address the unique skill set and challenges faced by public interest attorneys, e.g. doctrinal courses, clinical courses, and externships.
A formal pro bono program with a staff administrator (as opposed to a student-run program).
Active public service student groups that organize informational programs and opportunities for students to get involved in public service initiatives.
A well-funded loan repayment assistance program (LRAP) that helps graduates working in public service careers pay down their educational debt.
A summer grant program, preferably one where funding is guaranteed for qualified applicants, that provides funding for students pursuing unpaid public interest work during the summer.
Additional grants and scholarships that support students pursuing public service work during and after law school.
Recognition for students that meet a pro bono goal and/or demonstrate public service leadership.
A network of alumni working in public service that is available and willing to meet with and/or mentor students.
Clinical AND doctrinal faculty who practiced in the public sector prior to teaching.

Additional information to help prospective law students find a school that meets their personal and educational needs can be found in The Equal Justice Works Guide to Law Schools, a free, interactive, online database of public service programs, pro bono, financial aid, and curriculum at more than 150 law schools.

Economic recovery in Georgia

equaljusticeworks — Tue, 16 Mar 2010 14:48:44 +0000

This is another post in Equal Justice Works’ series on economic recovery. This post was written by Equal Justice Works AmeriCorps Recovery Fellow Anna-Elisa Mackowiak who is serving at Atlanta Legal Aid Society.

In late November 2009, Atlanta Legal Aid received a call from Ms. B and her son, who stated that their home had been foreclosed on and that an eviction action had been filed against them. Ms. B is a 65-year old African American widow who has resided in her home in DeKalb County, Georgia since she and her husband purchased it in 1977. Ms. B is blind and had both legs amputated in 2006. She has been confined to a wheelchair since that time. Ms. B’s son had to stop working in order to care for his mother full time. Ms. B has been living on a fixed income of Social Security disability payments since 1997.

In June 25, 2005, a mortage company extended a $37,599.00 mortgage loan to Ms. B. Prior to this transaction, Ms. B had only about two years left to pay off the original mortgage loan that she and her husband had used to buy the house, and a small remaining balance.

Then, in July 2006, the mortgage company took more of the equity out of Ms. B’s home by flipping her into yet another mortgage loan, this one in the amount of $75,000.00. Ms. B was fully disabled and living on limited Social Security disability benefits at the time. The loan application showed her monthly income as $1,203.75. Despite this fact, mortgage company extended her a loan with a total monthly payment of $662.01 – They extended a loan to a disabled woman living on a fixed income where the monthly payment consumed 55% of her monthly income. Making a loan with this debt to income ratio flies in the face of the lending standards put forth by the federal regulators and shows a reckless disregard for the risk of foreclosure. The reason that mortgage company went forward with this unaffordable loan is clear: Ms. B’s home was valued at $131,000 at the time of the transaction, leaving a substantial equity cushion. The mortgage company knew that in the event Ms. B was unable to pay the loan, it would recover the funds by foreclosing. This predatory and abusive lending practice is known as asset-based lending.

I worked with another ALAS attorney and we investigated the case, sent a demand letter, and negotiated with opposing counsel. The dispossessory action was dismissed and Ms. B and her son were able to remain in the home through the holidays.

This case is ongoing, and discussions with the mortgage company are continuing in order to attempt to negotiate a settlement. Sadly, Ms. B has passed away and will not see the fight to save her house come to an end.