Daily Business Review
July 10, 2009
Article by Jordana Mishory

The Florida attorney general's office will spend $4 million on legal foreclosure defense work from a settlement with Countrywide Financial for alleged predatory lending practices,

The money will be given to nonprofit organizations to hire a full-time attorney or paralegal to help homeowners facing foreclosure who cannot afford to pay for an attorney, said Sandi Copes, spokeswoman for the attorney general's office.

The funds will be awarded in $100,000 grants this year and next year, Copes said. The Florida Bar Foundation will handle the funds and accept applications, which must be approved by the attorney general's office.

"What we're trying to do with consumer-based settlements is put them toward programs that best help affected individuals if we can't provide them direct restitution," Copes said. "Pro bono legal service seems to be something a lot of these people are desperately seeking."

The funding is a slice of an estimated $1 billion Florida residents could receive from the October 2008 settlement.

Attorney General Bill McCollum, who is running for governor, sued Countrywide Financial and Countrywide Home Loans last summer for deceptive and unfair trade practices. Ten other states also made claims against what was once the nation's largest independent mortgage lender, and the nationwide settlement totaled nearly $8 billion.

Out of the settlement, nearly $20 million went to Floridians who were in foreclosure or lost their homes. Others received loan modifications. The settlement was expected to affect more than 57,000 state residents.

The plan is to have legal aid and other agencies apply for grants based on guidelines being prepared by the foundation, a public charity started by the Bar's board of governors.

Jane Curran, the foundation's executive director, said her organization will advertise and screen for legal aid programs. In addition, the attorney general's office will name two community action agencies.

Copes estimates the money could fund 25 to 30 attorneys.

When told of the attorney general's plan, Weston foreclosure defense attorney Roy Oppenheim called it "fantastic." He said having more attorneys working on foreclosure cases could help generate case law in Florida based on his contention that lenders "are illegally pursuing foreclosures in violation of homeowners" constitutional rights."

Costly appeals "will require the resources of the attorney general's office and the funding that his office would provide," Oppenheim said.

Jordana Mishory can be reached at (954) 468-2616