Consumer Protection

The Foreclosure Crisis and the Community Law & Business Clinic

Foreclosure remains a significant problem in most of the U.S. and for millions of families. After five months of relative decline, lenders accelerated foreclosure and repossession efforts during June 2013, as evidenced by an 11% increase in foreclosures over June 2012.

The loss of a home to foreclosure is devastating. In addition to being dispossessed of the home, families frequently lose personal belongings, incur costs for relocating and face significant challenges in finding new housing following the foreclosure. School age children face the challenge of a new school after frantically moving to another home, often disrupting their education. Finally, because the home represents the largest asset owned by most families, its loss can mean a permanent setback that limits options for financing college, building future assets or saving for retirement.

Although lenders have a legitimate claim to dispossess homeowners following default on a mortgage, it is often the case that the homeowner has options available to modify, forebear or otherwise protect their home. And by doing so, the homeowner can keep their family’s shelter while also preserving an asset for the community.

In 2011 the Community Law & Business Clinic published the first edition of the North Carolina Foreclosure Manual. Recently updated in 2013, this guide provides answers to the most common questions raised by homeowners and their advocates as they face foreclosure proceedings. The most recent edition of the guide is available online.

Since 2010, the CLBC has represented more than 100 families facing foreclosure and, in most cases, assisted these families in protecting their housing by securing modifications or settlements in civil proceedings. If you are facing foreclosure, and would like information about your options, contact the Community Law & Business Clinic.

Posted by Steve Virgil