The Legal Aid Society announces the launch of our Homebuyer Protection Project, a program that provides free legal counsel to limited-income people buying or refinancing a home in Jefferson County.  The first of its kind in the nation, the program helps pur­chasers avoid predatory loans that may result in unsustainable finan­cial commitments and economic instability. 

The Homebuyer Protection Project gives Legal Aid attorneys the opportunity to assess whether a client’s loan terms are fair, standard industry practice, or clearly predatory.  In addition, the program gives the homeowner the opportunity to fully understand the financial commitment they are making when buying the home.  A Legal Aid attorney also accompanies clients to the closing table to ensure the loan papers they sign contain the same terms they were promised.

A study conducted in 2007 by the Metropolitan Housing Coalition and Making Connections Louisville suggests that homeowners are unprepared for what happens at the loan closing table.  For example, nearly half of all residents interviewed for the study did not know until after they closed that their monthly payment did not include taxes and homeowners’ insurance. 

“Our experience at Legal Aid with clients in foreclosure teaches us that borrowers need two separate services when pursuing a home loan.  First, they need help understanding the loan terms and appreciating how the loan may change over time.  Second, a shocking number of our foreclosure clients tell us the loan they were presented at closing was not the loan for which they bargained.  As such, we will accompany clients to the closing table and be their advocate in what can be a high-pressure situation,” said Ben Carter, managing attorney at Legal Aid for the project.

“Oftentimes, the work we do at Legal Aid helps a client deal with the consequences of a transaction we wish we could have helped the client avoid at the outset.  For example, our housing attorneys are now helping homeowners facing foreclosure on mortgages that should never have been written, brokered, or approved,” said Jeffrey A. Been, Executive Director at Legal Aid.  “It is our hope that the Homebuyer Protection Project will help homeowners avoid transactions that would likely result in foreclosure within a few short years.” 

The Homebuyer Protection Project is made possible by a generous grant from the Annie E. Casey Foundation and is administered in coordination with Making Connections Louisville.