House Passes Mortgage Reform Bill Including $35 Million for Legal Aid

Today the House passed (300 -114) H.R. 1728, the Mortgage Reform and Anti-Reform and Anti-predatory Lending Act of 2009. This legislation targets abusive lending practices which have resulted in the national mortgage foreclosure crisis. It includes $35,000,000 for foreclosure-related legal assistance.

The provision on legal assistance states that (1) the funds be directed exclusively to foreclosure-related legal services for low- and moderate-income homeowners and tenants; (2) the funds be administered through the Department of Housing and Urban Development and distributed through a competitive grants process to state and local legal organizations; and (3) no funds be used for class action litigation or non-foreclosure-related services.

An effort to divert some of the legal assistance funding to other uses offered by Ranking Member Bachus (R-AL) was not approved by the Rules Committee setting the parameters of today's debate. The money authorized under this provision will still need to be appropriated to the Department of Housing and Urban Development for each fiscal years 2009 through 2012.

The National Legal Aid & Defender Association wishes to thank the co-sponsors of this bill, Reps. Barney Frank (D-MA), Brad Miller (D-NC) and Mel Watt (D-NC) for recognizing the overwhelming need to provide additional funding to legal aid programs that have been flooded with handling cases involving victims of the mortgage foreclosure crisis. NLADA will continue to update the field on any future Senate counterpart bill.