LAF ANNUAL LUNCHEON A SUCCESS!

On Friday, June 25, 2010 the Legal Assistance Foundation of Metropolitan Chicago (LAF) raised over half a million dollars  at its annual luncheon to support the free civil legal assistance it provides across Cook County to poor and underserved communities.  

 

(l to r): John Levi, President of the Board of the Legal Services
Corporation; Diana White, Executive Director of LAF; and
Laurie Mikva, Board Member of the Legal Services Corporation

Sheldon T. Zenner of Katten Muchin Rosenman LLP received the 2010 LAF Champion for Justice Award, which recognizes a member of the our  legal community who has given generously of time and talent on behalf of poor people in need of legal help. Sheldon was instrumental in bringing the first full-time pro bono coordinator to Katten Muchin, and the firm's pro bono department has done a tremendous amount of work in the Chicago community and on behalf of LAF.  Illinois Attorney General Lisa Madigan was on hand to present Sheldon with his award and commend him for his many years of dedicated service.  

Illinois Attorney General Lisa Madigan presents Sheldon T. Zenner
of Katten Muchin Rosenman LLP with the 2010 LAF Champion
for Justice Award

Lisa J. Palumbo, Supervisory Attorney of LAF's Immigration Project, received the 2010 Jerold S. Solovy Equal Justice Award, which honors an LAF attorney for outstanding and tireless work on behalf of poor clients who cannot afford an attorney but desperately need legal help.  Lisa is a leading immigration law attorney with a wealth of experience working with immigrants and refugees, both here at LAF and abroad in places as far-flung as Hong Kong, Geneva, and Guantanamo.  Immigration law has become increasingly complex and draconian, and LAF is lucky to have Lisa and her dedicated staff helping our immigrant clients with their legal needs. 

Lisa J. Palumbo, recipient of the 2010 Jerold S. Solovy Equal
Justice Award, talks about her career in immigration law.

The featured speaker at this year's Luncheon was Joann Jackson, an LAF client who was terminated from her position at Stroger Hospital in violation of the Family Medical Leave Act.  Her case went all the way to federal court, where LAF attorneys Elizabeth Rosenthal and Tim Huizenga helped her obtain a settlement worth over $100,000 that included back pay and full benefits.  Ms. Jackson also got her job back - and for her, that was the best part of her victory.  As she so eloquently put it, "I want to get up, make myself pretty in the morning, go to work, and make something happen in this world."  Ms. Jackson made a generous donation to LAF when her case ended, and she urged Luncheon guests to join her in supporting LAF.

 

LAF client Joann Jackson talks about her case, and how LAF
helped her to recover her job and her dignity.

It's not too late to support LAF!  You can click here to make a tax deductible donation.  Join Joann in making sure that attorneys like Lisa, Elizabeth, and Tim can keep on helping clients who desperately need legal assistance, but cannot afford to hire an attorney.

Have you joined LAF yet on Facebook?  Click here to visit our page, become a fan and see more photos from the 2010 Annual Luncheon!

Photography by Bill Richert

CHA to Open Registration for Family Housing Wait List Lottery

For the first time in over a decade, the Chicago Housing Authority is adding names to its family housing Wait List - the list used to fill CHA rental units as they become available. In total, CHA will randomly select the names of 40,000 families to add to the list, with all names chosen through a lottery process. To have your name added to the lottery, register online ANYTIME between June 14 and July 9, 2010. All registrations are considered equally, no matter when you apply during the open registration period. Registration is free and easy. For more information, visit CHAwaitlist.org or call 1-866-7-thecha (866.784.3242) or 311.  Also, to receive updates on your phone, text INFO to 75309

LAF in the Chicago Tribune

Lea Weems, an attorney with the Home Ownership Preservation Project (HOPP), was quoted today in the Chicago Tribune story highlighting the deception of immigrant homeowners in Chicago.

chicagotribune.com

Mortgage 'rescuer' preyed on immigrants, clients allege

Immigrants sue and say they were misled into surrendering deeds to their homes

By Antonio Olivo, Tribune reporter

 Click here to read the full story.

LAF ATTORNEYS TESTIFY BEFORE UNITED NATIONS HUMAN RIGHTS COUNCIL REPRESENTATIVES

APRIL 13, 2010 - Richard Wheelock, Supervisory Attorney of the Housing Law Project at LAF, and Daniel Lindsey, Supervisory Attorney of the Home Ownership Preservation Project (HOPP) testified this morning before a panel of U.S. Department of Justice, State and HUD Officials on the state of public housing in Chicago, which will be included in a report submitted to the United Nations Human Rights Council as part of the Universal Periodic Review Process.  The Universal Periodic Review is conducted by the UN as a means of evaluating the human rights records of all 192 nations.  Transcripts of their full testimonies are included, below:

DANIEL LINDSEY

Good morning, and thank you for the opportunity to present comments on the critical issue of unfair mortgage lending practices as we have witnessed them here in Chicago.

The Legal Assistance Foundation of Metropolitan Chicago is the largest provider of civil legal services to low-income residents of Chicago and Cook County.  Our Home Ownership Preservation Project has been representing low-income homeowners for almost 15 years.  Over those 15 years we have counseled tens of thousands of homeowners, and we have represented thousands of them in court. 

Most of these homeowners have been victims of predatory lending, that is, some type of negligent or abusive subprime lending.  Today the multitrillion-dollar subprime lending industry is dead, or at least it lies in ruins.  And of course the implosion of the subprime market has had severe adverse effects on the larger financial markets, both here and abroad, and has played a major role in fueling the rising tide of foreclosures, depressed real estate values, and other related economic woes.  Now, many thousands of homeowners face foreclosure not necessarily because they were victims of predatory lending, but often because they are simply victims of a larger economic crisis.

But as we continue to experience these wider patterns of economic strife, it is critical not to forget how it all began.  It is critical to focus on the problem of unfair mortgage lending-predatory lending-irresponsible subprime lending-call it what you will-because this is where the crisis began.  And it is critical to take steps now, and moving forward, to ensure that we do not face another similar cycle, by whatever name, five or ten or twenty years down the road.

The phenomenon of irresponsible and out-of-control subprime lending took off in the 1990's, and it skyrocketed in the 2000's, until its inevitable demise in 2007.  I say "inevitable" because we advocates were seeing practices back in the late 1990's which we knew to be unsustainable.  In the late 1990's and early 2000's we felt like lone voices in the wilderness telling stories of unaffordable loans being made to low-income homeowners, and foretelling an economic disaster in the making, but nobody was listening-at least, nobody with the power to regulate at the federal level.  Why?  Because, for a long time, too many people were making too much money, based on a system that was all about volume.  The more lending the better.  Period.

Let me share the story of one of our clients.  This story focuses on a loan product that was at the heart of volume-based, irresponsible subprime lending.  I am speaking of "stated income" loans, also known as "no doc" or "reduced doc" or "doc lite"-loans where brokers or loan officers could close loans simply by writing down a borrower income figure on a loan application, with no legitimate income verification required.  These loans were known early in the industry by the name "liar loans."  Brokers and loan officers were literally invited to fraudulently misstate borrower income in order to make a loan look affordable on paper.  Arguably, this single practice of intentionally loose underwriting did the most to fuel the subprime boom and bust.

Ms. Aikens was a 79-year-old African-American woman of diminished capacity.  She was issued a loan based on a broker's statement that she made $7,000 a month acting as a "housekeeping supervisor."  In fact, Ms. Aikens earned $7,000 a year doing part-time housekeeping for a neighbor.  In this particular case the fraud was not solely on the broker, for the loan file contained a document showing that an employee of the lender called to verify Ms. Aikens' employment-but, quite intentionally, the employee did not verify the amount of Ms. Aikens' income.  The lender in this case was Countrywide, once the highest-volume issuer of subprime loans in the country.

We were able to save Ms. Aikens' home, and we have been able to save the homes of many low-income borrowers.  In most of these cases we have challenged predatory lending practices such as inflated income, loan flipping, bait and switch, hidden interest rate increases, home improvement fraud, lack of meaningful disclosure of loan terms and fees, and the exploitation of non-English speakers, seniors, and the disabled.

But for every home we have saved, another 50 to 100 have been lost in Chicago alone.  Not surprisingly, these homeowners are disproportionately minorities.  Predatory lending was overwhelmingly targeted at minority neighborhoods.  In these neighborhoods there existed-and still exists-an absence of responsible credit, due in large part to the historic practice of redlining.  Capitalism abhors a vacuum.  So, where responsible lending is absent, irresponsible credit floods in.  In this case, subprime mortgage capital, fueled by a toxic combination of hyper-deregulation and hyper-securitization, flooded in.

What we all must do is make sure that irresponsible mortgage credit does not flood in again.  I have shared Ms. Aikens' story before.  I was among those who testified at a Federal Reserve Board hearing held here in Chicago in 2006.  The Fed was considering how it might amend the Truth in Lending Act to curb irresponsible subprime lending.  I shared Ms. Aikens' story, focusing on the phenomenon of liar loans.  So did others, here at other Fed hearings held in other cities.  As a result, the Fed passed a regulation in 2008 which significantly limited the use of stated income loans.  A good result, but by 2008 the market this regulation sought to regulate was gone.  Too little, too late.  In the future, policy-makers and regulators must heed the voices of our most vulnerable citizens and their advocates sooner; policy-makers and regulators must be proactive instead of reactive.  We do not want to face another financial crisis in which our most vulnerable classes of citizens-minorities, seniors, the disabled-again bear the brunt of economic oppression and again serve as the harbingers of economic peril for us all.

Thank you.

RICHARD WHEELOCK

My name is Richard Wheelock, and I am the housing supervisory attorney at the Legal Assistance Foundation of Metropolitan Chicago.  LAF is a legal aid program that provides no-cost civil legal assistance to low-income families in the City of Chicago and the Cook County suburbs.  We serve close to 30,000 indigent clients every year.   I have more than twenty-five years of experience in the area of public and subsidized housing and have served as LAF's housing supervisor since 1996. 

            In the fall of 1999, the Chicago Housing Authority first proposed as part of its Plan for Transformation to demolish fifty-one high-rises, including those at Cabrini-Green, Robert Taylor and Stateway Gardens, for a total demolition of 22,000 public housing units.  The plan is to replace these high-rise public housing developments with mixed-income communities, but with only 30% of the units set aside for public housing families. 

            As part of this plan for transformation, the CHA has purposely steered away from its original mission to provide affordable housing for very low-income families, i.e., families earning less than 50% of area median income.  Under federal law and the CHA's Moving To Work agreement with U.S. Department of Housing and Urban Development, 75% of the families the CHA serves must be very low-income.¹  

            Instead, the CHA has focused on filling its public housing units with higher income families, at a time when a severe housing mismatch exists for very low-income families, i.e., the supply of affordable housing simply does not come close to meeting the housing needs of the poorest of our society.  And at a time when the unemployment rate is at a 27-year record high.²  There are 256,000 more very low-income families than affordable units in the City of Chicago, according to the UIC's Voorhees Center on Neighborhood and Community Improvement.³   Whereas, for families making between 51% - 80% of area median income -  the upper income group eligible for public housing - there is only a 50,000 unit deficit, according to that same report. Id.

            CHA is dramatically shifting its focus toward these higher income families in a number of ways:

1.         In the mixed-income communities that have replaced the CHA high-rise developments, the admissions policies, which include a mandatory work requirement and rigorous credit check, effectively screen out the poorest applicants.

2.         The CHA Admissions policy for its traditional public housing developments also mandates a work requirement as a condition for occupancy, the violation of which means eviction.

3.         But even more significantly, this admissions policy mandates that up to one half of the units be set aside for higher income families, specifically families making no less than $22, 650 and up to $60,400 annually for a family of four. 

4.         With respect to CHA's Housing Choice Voucher Program, the CHA has just proposed the creation of a preference for working families for admission into the program.  So those families will jump to the head of the line in front of the unemployed. 

5.         In the next year or so, CHA plans to impose a working requirement for all its voucher participants.  Failure to comply would mean termination of assistance and homelessness for these voucher participants.

6.         And finally, CHA has just proposed to eliminate asset ceilings, which means that you can have as much money in the bank as you want and that will have no effect on your eligibility to have a housing choice voucher.

            The Chicago Housing Authority has declared that it is no longer the housing of last resort.  Well, if not the CHA, then who?  Who will provide for the housing needs for the poorest of our society? The right to housing as a human right will be meaningless if we, as a society, continue in this direction.

¹ See Section 204(c)(3)(A) of the Public Housing/Section 8 Moving to Work Demonstration (P.L. 104-134, April 26, 1996); CHA's MTW Agreement, Section 2(D); and 42 U.S.C. § 1437n(b)(1).

² On March 16, 2010, Crain's Chicago reported that "Unemployment in metropolitan Chicago jumped to 11.6% in January, the highest in almost 27 years."

³ See Affordable Housing Conditions and Outlook In Chicago: An Early Warning for Intervention, Natalie V. Voorhees Center for Neighborhood and Community Improvement (March 2006), http://www.uic.edu/cuppa/voorheesctr/Publications/vnc_woodsrpt_0706.pdf.