In 2007, lenders foreclosed 7,653 homes in Massachusetts, up 148% from 2006 and 600% from 2005. On average, almost 150 homeowners lost their homes to foreclosure every week in 2007 and these numbers are expected to rise in 2008. Worse, an estimated one-third of these homes are multi-family units, and the standard practice of banks in these cases is to evict all tenants in a foreclosed building. Many of these tenants have faithfully paid rent and complied with the terms of their leases and yet face a serious and immediate risk of homelessness.
“The current situation can only be described as a crisis,” says Lauren Leahy, President of the Harvard Legal Aid Bureau. “Legal aid organizations across the state, and even across the nation, are coming together to fight no-fault evictions due to foreclosure and to innovate solutions to this devastating trend.”
Foreclosing lenders, through local real estate brokers, use a program dubbed “cash-for-keys,” through which they offer a one-time payment of around $500.00 to tenants in exchange for their voluntary abandonment of the property. Many tenants, unaware that possession is worth significantly more money, and facing intimidation from banks and constables, leave their homes with almost nothing.
Additionally, banks serve deficient 5- and 15-day Notices to Quit, pressuring tenants to quickly leave apartments before filing actual eviction notices with the Court. Tenants lack the knowledge to fight these tactics, the money to pay for representation, and the resources to avoid homelessness.
As a result, the Harvard Legal Aid Bureau is in the process of formulating a focused plan to address the foreclosure crisis. “This issue requires our immediate and focused attention,” says Nick Hartigan, a second year student at the Bureau. Students have formed a “Foreclosure Task Force,” working with legal services providers and community groups across Suffolk and Middlesex Counties to assist tenants facing eviction due to foreclosure. One team of students is already hard at work drafting legislation to propose to city and state leaders. Numerous others represent tenants who are facing no-fault evictions due to foreclosure. The median settlement in these cases is $18,000, a life-changing sum for many tenants. “Part of this process is about making it more expensive for banks to litigate these cases. We’re trying to change the cost/benefit analysis of no-fault evictions,” says Dave Haller, another second year student.
Many Bureau students are also participating in community organizing efforts with City Life/Vida Urbana and other Boston non-profits in an effort to spread the word about tenants’ rights in the wake of the foreclosure crisis. When litigation fails, some Bureau students, working with community partners, are turning to extra-legal measures such as a recent blockade at a foreclosed home in Dorchester.
“Bureau students recognize that this is a serious issue,” says Dave Grossman, the Faculty Director at the Bureau. “They are demonstrating both passion and thoughtfulness in deploying a variety of strategies to help solve a crisis that is threatening to devastate our client community.”