ELYRIA, Ohio — It was two years ago this summer—the week ending June 22, 2007—that the first intimations of economic crisis hit Wall Street. That week, rumors, and subsequently figures, began to fly regarding a pair of Bear Stearns hedge funds that were heavily invested in complicated debt products.
I was interning at an asset management firm in New York, and by the end of the next month—once Bear Stearns had wound-down the funds as officially worthless—all of my colleagues, from the most senior money managers to the lowliest analysts, had sat through a number of crash courses in our conference rooms 40 floors over Midtown, covering the inner-workings of “mortgage securitization.” This process governs how a home buyer’s payments make it from Main Street to Wall Street, and what happens when the flow stops
Two summers later, I’ve decided to spend my time volunteering with the Legal Aid office in my home county in Ohio, with a special interest in foreclosure cases.
Legal Aid is a nationally coordinated set of programs that provide civil legal services to people who can’t otherwise afford them. And in Lorain County, Ohio—which has been unwillingly “deindustrializing” and losing good manufacturing jobs for my entire lifetime, if not longer—there is plenty of need.
The transition from Wall Street to Main Street—in Elyria a Main Street on which commercial prosperity long ago gave way to dive bars, used furniture stores, and storefront churches—leaves a bitter taste of a boom that, for many, never was.
The downtown of this city of 50,000 probably hasn’t seen any large-scale commercial development in the past two decades aside from a gleaming glass-and-steel hospital complex. A similarly-styled seven-story “Justice Center” casts its shiny bureaucratic glory over the faded grandeur of the city’s original court house.
The big-time jury trial court rooms lie on floors three through seven, but most of Legal Aid’s cases don’t make it past the Justice Center’s second floor—Domestic Relations. The first floor, meanwhile, is the paper mill, absorbing and spitting back out the endless rounds of documentation composed, notarized, respectfully submitted, and acknowledged in cases like home foreclosure.
The foreclosure cases we now see in the office are no longer the people who got connived into taking inappropriate mortgages—mortgages that encouraged the buyer to pay only interest and not build equity in the house, or that would reset in 2 years and double their payments. These days, the typical homeowner facing foreclosure seems more likely to have simply lost a job—in a steel plant or a bank or as an auto-mechanic—and fallen behind on payments.
And so on ground level the legal options available in such cases are discouragingly few. Lawyers can search for inconsistencies in the documents filed with a court in a foreclosure action, creating enough extra time for a homeowner to find a job or to work out an agreement to modify the mortgage.
Yet even as foreclosures continue apace, most of the cases the office handles—as well as those we’re forced to turn away due to our limited stock of attorneys—fit less conveniently into a narrative. A few types of cases make up the bulk of Legal Aid’s work even as, according to the attorneys in the office, the mix has changed with the downturn. Lost jobs tends to mean more domestic violence-related divorces and more claims from workers who are wrongfully denied unemployment benefits, as well as a greater need for papers requesting a court modify child support payments that a laid-off worker can no longer afford.
One client seeking the latter relayed that his steel plant told him they could take him back from furlough “when we get $4 gas again”: They make pipes for offshore wells.
Wrongful eviction and Social Security-related issues remain “popular” as well. The most noteworthy case I worked on involved a woman whose welfare benefits were terminated after bureaucrats determined that taking her mom to chemotherapy wasn’t a “good excuse” for missing a job training program; her case is still awaiting resolution.
Seeking to help out a little, and to zoom out from a perspective of the world as numbers on a page, I’ve run into more than I bargained for.
Max J. Kornblith ’10, a Crimson editorial writer, is a social studies concentrator in Cabot House.