Reports of 2005 Brooks Consumer Law Fellowship Recipients

Clark County Legal Services (Nevada)

Clark County Legal Services hired two Brooks Fellows to expand its existing advocacy that challenges the illegal practices of unscrupulous businesses in Las Vegas, one of the fastest growing cities in the U.S.  The Fellows engaged in impact litigation in areas including automobile sales and title pawn cases, payday lending, and other types of predatory lending.  Priority was given to systemic issues amenable to class action treatment, and to the needs of both low-income African-American and Hispanic consumers.

Brooks Fellow LeAnders Jones represented consumers in cases against car dealers and their assignees involving fraud and deceptive trade practices in both federal and state court.  She researched and wrote a FDCPA complaint and successfully resolved the litigation.  In two-thirds of her active cases, she provided representation to minority clients, and she attended outreach functions in the predominately Latino and African-American communities of Las Vegas.

Many of LeAnders’ cases involved payday loans as a result of the implementation of a new Nevada law offering much greater protections to consumers who have taken out such loans.  She assisted the clients by negotiating settlements or voiding the loans under the new law.  In one noteworthy case in which a payday lender sued a consumer, LeAnders was able to get the loan voided and get $1,000 statutory damages for the consumer under the new law.  LeAnders also evaluated the potential for class action suits regarding payday loan practices, charging tenants fees in addition to rent, and other predatory practices. 

Additionally, LeAnders presented a lecture on the protections given consumers by the new payday lending law during a consumer education series that is periodically re-shown on a local public television channel.  Another project involved the creation of litigation forms (Answers, Interrogatories, and Document Requests) for consumers to use pro se when a debt buyer or payday lender has sued them. 

Brooks Fellow Courtney K. Lee enabled Clark County Legal Services to file more cases and represent more clients.  CCLS has also been able to focus on specific predatory issues such as payday loans, class actions and Truth-In-Lending violations.  A majority of the cases handled by Courtney involved enforcement of Nevada law (NRS Ch. 604A) enacted in 2005 regarding short-term, high-interest loans.  Courtney’s other cases involved undisclosed rebuilt wreck cases in litigation in federal district court or state court, which may involve Deceptive Trade Practices, fraud, concealment, failure to disclose salvage title, and/or violation of the Motor Vehicle Information and Cost Savings Act.  Her special projects included consumer awareness workshops to educate the community about the costs of payday loans.

Land of Lincoln Legal Assistance Foundation (Illinois)

Land of Lincoln used its Brooks Fellowship to expand its anti-predatory lending advocacy on behalf of low-income individuals in rural southern Illinois, with outreach and services targeted to communities with significant African-American populations.  Land of Lincoln has always covered consumer law; however, the Carbondale office had in the past only been able to devote 20% of an attorney’s time to consumer law issues.  With the Fellowship funding, they dedicated 100% of their Fellow’s time to their Homeownership Defense Project, replicating the successful work done by the program in its other more urban offices including East St. Louis.  The program is committed to retaining the position after the two-year period of the Fellowship, and building on the Fellow’s significant expertise on predatory lending issues in a rural office.

Brooks Fellow Sandi Gordon was hired to implement the Homeownership Defense Project in the Murphysboro office on behalf of low-income individuals in rural southern Illinois.  A substantial amount of Sandi’s time at the beginning was spent on outreach in communities with significant African-American populations, which resulted in increased referrals to the project.  She averaged two to three new foreclosure intakes per week.  One of the Jackson County foreclosure cases she defended was a classic example of predatory lending involving door-to-door salesmen harassing a disabled, uneducated, elderly couple at their home until they signed up for an equity-stripping loan.  Sandi filed answers, affirmative defenses and counterclaims in several foreclosures, as well as saving several homes through workouts. 

Sandi reviewed local court foreclosure data in Alexander, Jackson and Pulaski Counties for 2004-2005.  She researched foreclosure cases in all three counties to examine factors such as location of property, date and term of loans, loan originators, foreclosing lenders, interest rates, balloon and prepayment penalties terms. The results showed which cities in those counties were most affected by foreclosures, as well as the most predominant originating and foreclosing lenders, and the highest APRs.  Sandi was in communication with Banterra Bank, one of the institutions with the highest foreclosure numbers in the target counties, and worked on a partnership for developing a community financial literacy program for the area.

Legal Aid of Western Missouri

LAWMO used its Brooks Fellowship to work with homeowners in Kansas City’s minority neighborhoods that have been vulnerable to predatory mortgage lending, to represent homeowners in challenging the most egregious predatory loans in those neighborhoods, and to encourage non-predatory lenders to make loans in the target minority neighborhoods.  The damage done by predatory lenders in Kansas City’s low-income minority neighborhoods is some of the worst in the country.  The program ultimately plans to expand this effort to other neighborhoods in Kansas City and to other parts of their 40-county service area.

Brooks Fellow Susan Kephart focused her efforts on a small number of minority neighborhoods in the urban core of Kansas City, with a predominantly African-American population and a large percentage of senior citizen homeowners.  With 25 years of experience at LAWMO, Susan spent the majority of her time representing homeowners with unaffordable, predatory loans.  She filed several Chapter 13 bankruptcy cases to stop foreclosure sales, and handled a few predatory lending cases in federal district court.  Several other objections to claims were successfully resolved, resulting in significant reductions in claims.  A few clients rescinded predatory mortgage loans within their three-day TILA rescission period, and other clients with predatory loans who did not want to pursue litigation received advice from Susan.  In addition to litigation, Susan developed working relationships with non-predatory, local lenders in Kansas City to facilitate refinancings when needed.

Susan also dedicated several hours each week to community outreach and education in the targeted neighborhoods.  Her efforts resulted in a steady increase in the number of people seeking assistance.

Susan worked to increase private attorney involvement in predatory lending cases.  She provided direction and mentoring to pro bono attorneys representing homeowners victimized by predatory lenders and contractors, through LAWMO’s Volunteer Attorney Project.  Susan participated in two VAP trainings on predatory lending and housing discrimination.

Legal Aid Society of Greater Cincinnati (Ohio)

LASGC used its Brooks Fellowship to increase its ability to handle homeowner defense and predatory lending cases, to address scams such as “foreclosure solution” businesses, and to push to correct the lack of state consumer protection statute coverage for mortgage lenders in the state of Ohio.  Data from the Mortgage Bankers Association show that Ohio was first in the nation in home foreclosures during the first quarter of 2004, with rates for subprime loans even worse.  Racial minorities in Cincinnati, particularly African-Americans, have been frequent targets of fringe banking practices and scam artists.  This program plans for the Fellow becoming a permanent member of the staff and continuing to practice in consumer law and related poverty law issues after completing the two years of the fellowship.

Brooks Fellow Beth Mulcahy, an attorney with three years of experience at LASGC, investigated and litigated homeowner defense and predatory lending cases, to address scams such as “foreclosure solution” businesses.  Beth’s work consisted primarily of individual client representation, including cases in foreclosure defense, chapter 7 bankruptcy, collection defense, garnishment, identity theft and fraud.  Successful outcomes achieved include securing dismissal of an $11,000 debt collection lawsuit by a debt buyer against a disabled client, securing dismissal of a $9,000 debt buyer lawsuit against a widowed client, negotiating loan remodifications to save the homes of clients in foreclosure lawsuits, and obtaining the release of exempt bank account funds wrongfully garnished in debt collection cases.  Additionally, Beth prepared home improvement scam cases for referral to private attorneys. 

Beth devoted significant time to developing a case involving a fraudulent foreclosure rescue scheme, filed against two companies in December 2006.  In addition to monetary damages, the suit seeks injunctive relief against these companies’ abusive practices. With the election of a more consumer-friendly Attorney General, they anticipate requesting that office to intervene in the hopes of getting a broader injunctive remedy.

Beth also established and supervised a Pro Bono Bankruptcy Clinic to deal with the large number of requests for bankruptcy representation.  Finally, she worked in the Ohio state legislature for passage of anti-predatory lending legislation, drafting statewide rules regulating mortgage brokers and appraisers.

Legal Aid Society of Middle Tennessee and the Cumberlands

The Brooks Fellow, Janet Mynatt, worked out of the Legal Aid Society’s Oak Ridge office, in an effort to expand representation in the area of consumer law to clients throughout its large rural service area.  The Oak Ridge office has a strong reputation for reaching out effectively to predominantly Spanish-speaking communities.  Janet specialized exclusively in consumer law cases, including predatory automobile financing. The Legal Aid Society anticipates that this will be a permanent position, as Janet has developed expertise and produced significant benefits for clients throughout the service area.

Janet represented low-income clients with consumer law problems including home mortgage foreclosures, residential sale-lease agreements, home mortgage refinancing and predatory lending, predatory automobile financing, repossession, warranty and repair issues, debt collections, breach of contract claims, student loans and credit reporting difficulties.  Janet distributed the Legal Aid Society’s consumer brochures in English and Spanish at numerous outreach presentations and community education events, and regularly received referrals of Spanish-speaking clients for consumer representation.

Specific cases included: successfully defending clients in collection cases involving automobile purchase and financing agreements; enforcing warranty and contract claims for clients with used car purchase problems; enforcing of truth-in-lending rescission of home mortgage loans with claims for truth-in-lending recoupment and damages; and avoiding home mortgage foreclosures through an adversary claim in a chapter 13 bankruptcy.  Janet counseled clients about debt management and credit reporting problems and asset and income protection.

Janet was co-counsel with advocates in other program offices on an affirmative federal court action challenging a fraudulent “home equity rescue” scheme that resulted in a favorable settlement for the client.  She consulted regularly with attorneys in the local private bar for assistance, referrals and to explore co-counseling in appropriate cases.  For instance, she co-counseled with a local private attorney in a federal court action alleging fair debt collection, fair credit reporting and state consumer protection statute violations.

Mississippi Center for Justice

MCJ provides a concerted, statewide capacity for legal advocacy to combat the continuing problems of discrimination and poverty that significantly affect the lives of African-Americans in Mississippi.  The Center addresses the legal needs of low-income people and communities of color in Mississippi, having created the first consumer law unit in the state in order to make a concentrated effort to provide legal representation to protect vulnerable consumers and to promote economic justice.  The Brooks Fellow, David Miller, led the development and implementation of its statewide consumer law advocacy efforts, and initiated litigation, policy advocacy and community initiatives to attack predatory financing and to support the creation of viable alternatives.

David’s initial plans were to focus on predatory payday lending but changed substantially in light of the Hurricane Katrina disaster.  David served as part of MCJ’s Katrina response team, particularly within the Mississippi Legislature.  His emphasis focused on predatory mortgage lending, repair scams, and housing law as it related to hurricane survivors.  He developed in-house and working group expertise on predatory mortgage lending and repair scams, and helped develop a system for providing legal representation to vulnerable consumers in the affected areas.  He advocated for a grant program designed to help homeowners without flood insurance (that was ultimately defeated), as well as still-active bills to provide oversight and tracking of federal relief funds and to grandfather pre-existing structures occupied by low-income families.  David contributed to a published report on the status of Mississippi consumers post-Katrina.

Beyond Katrina-related issues, he worked in conjunction with faculty at the University of Mississippi School of Law to draft a landlord-tenant bill to codify the warranty of habitability and a separate bill to outlaw self-help evictions.  He also worked on two bills to reform payday lending oversight and practice in the state, an issue of particular importance to the low-income African-American communities targeted by the practice.  He was responsible for organizing a successful two-day predatory mortgage lending training in February 2006 that had to be rescheduled from September in the wake of Katrina.  David participated in a coalition to influence the use of federal CDBG funds to support low-income housing, lobbied the Mississippi Attorney General to step up price-gouging enforcement, and engaged in a successful media campaign on the need for payday lending and predatory mortgage lending reform across the state.  David also took on clients in collection and contractor fraud matters.

New York City Consumer Justice Project

This joint project of South Brooklyn Legal Services (SBLS) and the Neighborhood Economic Development Advocacy Project (NEDAP) expanded existing collaborations between these organizations to address an array of non-mortgage-related consumer problems that plague New York City’s low-income communities of color.  An experienced staff person, Claudia Wilner, served as the Brooks Fellow, targeting tax refund anticipation loans, high-cost check cashing, payday loans, rent-to-own stores, and unscrupulous money wirers.  The programs plan to sustain and even expand the project, with the intent of hiring additional full-time staff.

Claudia came to the project with two years of experience. She started and expanded a consumer justice hotline, which provides information and referrals to low-income people and people of color on a wide range of discriminatory banking and credit practices.  The hotline receives dozens of calls each week.  In addition to overseeing the development of a referral guide and resource manual for people staffing the hotline, Claudia also fielded over 800 calls with two legal volunteers, a paralegal and a Spanish language interpreter (many people contacted the hotline more than once). 

Claudia took on individual cases, representing mostly women of color, in credit card debt collection cases brought by debt buyers in NYC Civil Court.  She selected the cases based on the high volume of debt collection-related calls to the hotline, and with an eye towards gathering evidence and information about particularly problematic debt collectors and/or collection firms.  Claudia also worked with a team of experienced public interest lawyers to evaluate several larger consumer cases for litigation.  In September 2006 she prepared her first FDCPA lawsuit, alleging that the named debt collectors engaged in unfair and deceptive practices by filing hundreds of frivolous cases in the NYC Civil Court to collect debts allegedly owed to AT&T Wireless, which went out of business in 2004.  

Claudia participated in policy reform efforts in connection with a statewide consumer financial justice/fair lending coalition.  At an exploratory public hearing held by the NYC Department of Consumer Affairs, she testified on debt collection practices that harm low-income New Yorkers.  She also operated a weekly community law clinic in partnership with a community development credit union in Harlem, attended by several clients each week, and led a comprehensive training on debt collection issues for approximately 50 legal services attorneys from throughout New York City.  Finally, she developed a series of written “self-help” material on frequently raised hotline issues.  With this series she has helped many represent themselves in court. 

Texas Civil Rights Project

Because of unregulated rural development and a shortage of low-income housing, more than half of the Mexican-American families in the Rio Grande Valley – about 500,000 people – live in unincorporated communities known as colonias, essentially rural ghettoes where residents don’t have running water, wastewater treatment systems, electricity, or paved roads.  The Brooks Fellow, Corinna Spencer-Scheurich, directed the South Texas Colonia Consumer Rights Project, located in TCRP’s San Juan, Texas office, in the heart of the Rio Grande Valley.  The project included a vigorous litigation program, led by the Fellow, with cases developing from systemic issues that emerged from community education meetings or otherwise came to Corinna’s attention.  The program expects to achieve its goal of sustaining the new consumer law position after the two-year fellowship.

A new attorney, Corinna served almost exclusively low-income Mexican-American and other Latino populations living in rural colonias.  While working on a range of advocacy for her target population, she focused on two areas that have serious negative effects on colonia residents – predatory mortgage lending and utilities.  She advised a large number of people and litigated several predatory mortgage lending cases within this community, including improper foreclosures on homes and repossessions of mobile homes.

Corinna also represented 25 consumers against the La Joya Water Supply Corporation for a range of billing and service problems.  She was instrumental in protecting the consumer rights of 50,000 people by working intensively with the Receiver on billing procedures, customer service, and cut-off procedures for nonpayment.  She also worked with customers of four other water utilities to resolve billing errors, problems with water quality, and even failure to provide consistent water pressure to poor neighborhoods.

Corinna objected to the nationwide class action settlement in De Hoyos, et al. v. Allstate in the Western District of Texas, San Antonio, because of concerns over notice and access to claim forms, especially for low-income and Spanish-speaking claimants.  After overseeing additional protections for claimants and an extended claims deadline, she withdrew the objection. 

Corinna worked with community organizations to give residents of the colonias information about how to protect their ownership rights and their rights and responsibilities under different mortgage contracts.  She was also very successful in using noteworthy cases to obtain publicity for her work in the Spanish-language media.

Texas Legal Services Center

Texas Legal Services Center used the Brooks Fellowship to advocate on behalf of low-income Texans before state agencies and through consumer education and outreach.  For 28 years, TLSC has assisted low-income Texans before public agencies that establish consumer protection guidelines.  TLSC also operates a statewide website known as Texas Law Help, which received nearly 9,000 visits in April 2005.  As with other Legal Aid programs in Texas, approximately two-thirds of TLSC’s clients are African-American or Hispanic.

The Fellowship enabled Brooks Fellow Greg Miller to advocate before the Texas Consumer Credit Commission, the Texas Finance Commission, the Texas Credit Union Commission and the Public Utility Commission.  Through the Texas Consumer Advocacy Project, Greg’s advocacy before public agencies was supplemented by the creation and website publication of consumer self-help publications regarding rights and responsibilities of consumers under Texas law.

Greg also represented approximately 20 clients in various matters. The clients live in different parts of the state including Bastrop, Laredo, Dale, Austin, and San Antonio. They came from different sources including Volunteer Legal Services, Texas RioGrande Legal Aid, and referrals from private attorneys.  Representation involved all aspects of litigation from negotiating settlements to participating in hearings.  Cases included deceptive trade practices involving real property sales, automobiles, consumer goods, and business opportunities and abusive debt collection practices.

Representative cases included:

• Eight individuals in East Austin, most of who speak primarily Spanish, entered into a fraudulent contract for deed transactions involving a scam artist. The person who sold the house did not inform clients that the homes were subject to a superior vendor’s lien.  The seller defaulted on this lien and the homes were in danger of foreclosure. Greg worked with the Attorney General’s Office to secure title to the clients’ homes and to secure damages.
• A single woman in San Antonio entered into a fraudulent contract for deed transactions involving a scam artist who sold houses that it did not own to low-income consumers.  The seller put advertisements on abandoned homes, encouraged people to move in on the assumption that they bought the houses, and then collected rent (which the consumers thought were mortgage payments) for as long as possible.  One adverse consequence, other than the theft of consumers, was that in some cases the homes were uninhabitable and scheduled for demolition by code enforcement.  This particular client was defrauded for $1,900, and Greg obtained a settlement for her.
• A man in Austin entered into a fraudulent business opportunity contract pertaining to a janitorial services franchise.  The company took all of his savings in exchange for the false promise of a viable business opportunity.  The company promised to provide a certain amount of business accounts to the consumer but has yet to do so.  The agreement also is marked by a failure to provide statutory disclosures pertaining to business opportunities.
• A Spanish-speaking woman from Dale was tricked into an auto lease when she wanted to buy, and then was charged with a deficiency on the account when she returned the truck after learning it was a lease.  There is reason to believe that this is a common scam.  Greg obtained a settlement for this client.