Georgetown 3L Joseph Sant has quite a feather in his cap, having an  Op-Ed published in the New York Times.  It’s not easy to do under any circumstances, and particularly when the author is still a student.  It’s well-written piece.

If only that were enough. 

Sant writes of the suffering of the Legal Aid Society.  I can think of a long list of grievances that the LAS could properly advance, from their lack of funding to their being overworked and wrongly treated like the dregs of the legal profession.  Unfortunately, these are not the grievances advanced by Sant. 

The Times piece is all about the Legal Aid Society’s representation of “poor homeowners caught in the subprime-mortgage meltdown.”  Huh?  In some places, the LAS provides civil representation to those qualified with regard to foreclosure.  There’s nothing wrong with that, despite the fact that the LAS generally is stretched too thin to provide criminal defense to the indigent.  If they can provide aid, that’s good.

But Sant’s view is that the LAS should be at the forefront of a political campaign to win cash and prizes for the subprimers.  That’s another matter altogether, and the sort of argument that will make people push to withdraw support for funding the Legal Aid Society for being where they don’t belong.

But [Legal Aid] lawyers are hamstrung by federal regulations that limit homeowners’ access to speedy, low-cost legal relief.

No, No, No.  There are no regulations that limit homeowners’ access to anything.  There are regulation that limit the LAS, which receives governmental funding, from engaging in political activities.  Homeowners are free to go hire a lawyer, whether by fee or contingency, any time they want.  A good time might have been before they signed their names 37 times on the mortgage papers.

One restriction prohibits legal aid lawyers, unlike their corporate counterparts, from collecting attorney fees on behalf of vindicated clients. Fee awards are an incentive for both parties to negotiate quickly because legal costs increase as litigation drags on. Recalcitrant lenders can stall as long as they like, knowing it will cost them nothing.

First, let me say that it doesn’t quite play out that way, but this would reflect the difference between a law student’s theoretical view of the world versus real life.  Since the vast majority of civil cases settle, no attorneys fees are awarded regardless of their availability.  And it is always in the defendants’ interest to drag things out.  But more importantly, what exactly do you mean by “vindicated clients?”  Are they plaintiffs or defendants, and if defendants, in what action.  Foreclosure?  As in they committed to paying 6 times their monthly earnings, and should now be relieved of that responsibility?  And keep the house?  Where do I sign up?

Another counterproductive regulation prevents legal aid lawyers from lobbying lawmakers with solutions to repair our mortgage markets. Policy deliberation is an echo chamber, dominated by financial players, excluding legal aid experts, who criticized short-sighted deregulation.

Well, that’s neither quite true nor quite right.  There are associations representing the perspectives of indigent defenders that engage in lobbying efforts.  But they aren’t lobbying on behalf of the poor homeowners?  Maybe that’s because the definition of victim in this situation is hardly as clear as you think.  And what “solutions” do LAS lawyers know that no one else has thought about?  Maybe they should just whisper it to some other “unrestricted” lawyers, who can then wrap Congress around their pinky and fix this whole mess.  If they have an answer, don’t keep it a secret.  Hey, just stick it in the comments below and I’ll personally forward it to Congress.  I’m sure they will appreciate it, and I’ll give the LAS credit for the idea.

Finally, federal law forbids legal aid lawyers to undertake class action litigation, preventing them from attacking systemic abuses in the real estate industry. Class actions offer the best chance for taking on foreclosure fraud, identifying illegal fees, recovering stolen equity and sending powerful signals to would-be predators. Instead, legal aid lawyers must prosecute cases one at a time.

While I seem to recall Michele Maxian, formerly of the New York Legal Aid Society, doing some “special projects” involving class actions, let’s assume that Sant’s correct.  When it comes to his poor homeowners, what class actions is Sant talking about?  Downtrodden Homeowners who agree to take mortgages they can’t afford versus Evil Subprime Lenders who give mortgages to people with no assets and no income?  Don’t they teach students at Georgetown that when claims are dependent on the individual facts of each case, they really aren’t class action material?  And if he wants speedy justice, class actions certainly aren’t the way to go.

I don’t for a moment doubt that Sant’s heart is in the right place, and his arguments are all well-intended.  But promotion of well-intended but misguided positions tends to invite rebuke that just makes things worse.  I strongly support the work of the Legal Aid Society, and I don’t want to see it become the butt of public ridicule over squandering its very limited resources on a blanket vision that homeowners are victims, an argument with which many (myself included) have some very real issues.

Most homeowners facing foreclosure did not seek out perilous mortgages with irrationally high interest rates, nor were they able to bargain with lenders on an equal footing. Subprime lenders aggressively went after the financially unsophisticated like the elderly, their fixed incomes strained by the increasing cost of living, and those in low-income and minority neighborhoods.

If the federal government had not weakened and silenced legal aid, borrowers would have been far better protected against the abuses of our unregulated subprime mortgage industry. Now that many of these families risk losing their homes, we should get rid of misguided regulations on the lawyers who can best help them.

These rates aren’t exactly irrational.  These subprime lenders provided a means for people without savings to purchase a home, something they could never had done otherwise.  They assumed significantly higher risk, and needed significantly higher returns to cover the losses when a significantly higher proportion of borrowers defaulted.  Had these evil lenders not been so evil, these poor homeowners would not have been homeowners. 

Had the real estate market itself not bottomed out, then crashed, these same poor homeowners might have been able to refinance based upon the undeserved equity in their homes, obtained better rates and lived happily ever after inside their very own home.  Don’t you see that this opportunity would have never existed without subprime mortgages?  They just don’t give homes to people with no money because they have a nice smile.

Is it true that many subprime borrowers didn’t appreciate what they were getting into?  Of course, but then the same holds true for so many things in our society, where people act on matter of great importance in their lives with little thought and less knowledge.  Should the LAS have opened “mortgage closing clinics” to advise poor homeowners not to sign those bad mortgage papers because of their “irrationally high interest rates?”  Would you feel better knowing that you saved your clients from high interest and denied them any chance of home ownership?

I think it’s wonderful that a law student has gotten an op-ed published in the New York Times.  For Joseph Slant, this is a great day.  For the Legal Aid Society, not so great.  What backlash this will cause to impair the LAS’s primary function, the defense of the indigent, has yet to be seen, but the door is wide open for its detractors.  The work of the Legal Aid Society is too important to be sideswiped by a piece like this, and the New York Times should know this and be more responsible about what it publishes.