GLC's Prevention of Homelessness Partnership makes final of Scotland's social care awards

GLC's Prevention of Homelessness Partnership (POHP) - a partnership between Glasgow City Council's South West Community Health Care Partnership, Govan Money Matters Advice Centre and GLC - has been shortlisted for the 2010 Scottish 'Care Accolades Awards'.

This is the 'Oscars' for social care services in Scotland, and we are delighted to have made it to the finals of these prestigious awards.

A short documentary film of the work of the POHP can be seen here (opens in Real Player). This is a powerful 15 minute documentary of the work of Govan Law Centre and it's local partners in Glasgow's Southside with respect to their innovative work to prevent homelessness on a long term, sustained and holistic basis.

Paying for Protection: The High Cost of Reform

Last week, the EPA announced a national contest for videos promoting the notion that federal regulation makes life good. The rules of the contest explain that regulation touches every part of American life and that there are approximately 10 federal regulations for every law that Congress passes. Each video must contain the phrase, "Let your voice be heard." The winning entry will receive a $2500.00 cash award.

It's too bad that nobody is sponsoring a contest to describe the ways in which federal regulation makes life worse. The government would certainly have many more entries to choose from, and we small business owners who have had our livelihoods trampled on by excessive government regulation could surely use the prize money.

The government may not want to hear the other side, but in the interests of a fair and balanced debate, I wanted to devote a little space to ways in which regulation is cumbersome and expensive. Maybe if all of the rest of us let our voices be heard, we would see some real hope and change.

For instance, in January of 2010, long anticipated changes to the Real Estate Settlement Procedures Act, which governs all residential real estate transactions in the United States, went into effect. The government started working on these reforms in July of 2002. As the president of the El Paso Association of Mortgage Brokers at that time, I worked over a long period of time lobbying against this piece of rule-making by the Department of Housing and Urban Development (HUD). HUD argued that the changes would save consumers hundreds of dollars in unnecessary settlement fees by allowing consumers to shop more effectively for a loan. Our argument was that the provisions of the new act were anti-competitive for small businesses and tilted heavily to favor large banking institutions. In retrospect, both of us were wrong. Consumers shop most effectively for a cheaper loan when they have plenty of choices available to them, and they save money when they close their transactions on time. As for us, the forms are not anti-competitive; they are completely unintelligible. It's hard for the consumer to know what he's paying for when no one in the transaction can understand the estimate he has been provided.

So what does this mean in real life? Prior to January 1, 2010, if you went to a loan officer to get a loan, you received a one page good faith estimate that listed all of the anticipated costs on your loan. This included the origination fee, junk fees, any points you were paying, escrows for taxes and insurance, etc. At the bottom of the page on the left was a column that showed how much cash you could expect to bring in if you were buying a house, and at the bottom of the page on the right was a breakdown of your anticipated monthly payment including your taxes and insurance. You signed and dated the form on receipt. If you wanted to negotiate a fee with the loan originator, you could do so by looking at the form to see how much each individual fee was and negotiating to reduce or eliminate it.

The new form is three pages. The fees are lumped together, so that you no longer see what your originator is making or what junk fees are included. Some of the fees are not yours--they are the sellers. Some of the fees no one is actually going to be paying at all, unless you really want a home inspection for that house you have already lived in for twenty-five years that you have decided to refinance. But by federal law, all are listed as an expense. In addition to the three page form, there is a fourth page that lists the various companies whose fees were included on the estimate in case you want to shop for a different vendor. Be sure to ask your loan originator what your monthly payment is--that is nowhere on the form, so if you fail to ask you could be surprised at closing. You do not sign the new form--signing the new form is considered "defacing a federal document". Instead, you sign an additional page which states that you have reviewed the good faith estimate. In addition to the good faith estimate and the other attachments, you receive a 45 page booklet prepared by HUD explaining to you how to read the good faith estimate. So we now have 5 pages of documentation and a 45 page booklet which give you less information than the 1 page form we used before January 1.

The new forms are a binding contract with the buyer, so you cannot get your appraisal started until you have reviewed the good faith estimate for three days. The lender is completely responsible for any charges on your final documents that do not appear on the good faith estimate, so they have to carefully review everything before your loan can go to underwriting. And they have to review it again before closing.

Two months ago, I closed a purchase loan for a very prominent executive here in El Paso. He had refinanced his home in December to take advantage of extremely low interest rates, and then a couple of months later, he decided to buy a new house. He is highly paid, very well educated, and has very little personal debt and credit scores over 800. Further, he has considerable savings in investment accounts and was making a 20% down payment on the new home. After we packaged the loan and sent it in to the lender, the lender had to first review all of the new estimates, and then they had to decide whether they wanted to make him a loan at all. Concerned that maybe he got a loan he really did not deserve in December when he refinanced his house (why did he care about getting a better interest rate on the home he already owned if he were thinking about moving?), the lender was prepared to correct the situation by not giving him a loan he clearly deserved in February. It took them four days to decide to go forward with the loan.

When we finally got through underwriting and were ready to close, it was Thursday. My borrower had taken the week off from work to get some items packed, and he had movers scheduled for Friday morning. Prior to January 1, we would have sent a request to the lender asking them to prepare the documents so that he could close and get his keys Friday morning. Since it takes about 2 hours to prepare documents, we would not have had any problem closing right on time. Not any more. We were informed that the new policy is that we have to wait 48 hours after loan approval before the closing department can start preparing the documents. The new regulations require more time. Unfortunately, my borrower had to be out of town for work related travel starting the following Monday.

In the end, the borrower signed a lease agreement on the house he was moving into with the seller to lease the house for five days at a cost of $440.00. By the time that all the delays were finished, we closed the following Wednesday. When he asked me to explain the reason for the delay, I simply told him, "The government has introduced new regulation to protect consumers. Because of that new regulation, there are a lot of new delays because the lender has to have plenty of time to check and recheck the documentation to make sure it is correct, and for this reason they cannot close you until next week. Do you feel protected?" Do you?

FSA takes UK banks to task over complaints handling

The Financial Services Authority (FSA) is taking tough action after finding weaknesses in five banks handling of customer complaints. It is understood the worst UK banks as regards complaint handling include Lloyds TSB (Bank of Scotland), Barclays, Royal Bank of Scotland, and Santander (the former Abbey National).

As a result of the review, five banks are undertaking major changes to the way they deal with complaints and two of the five banks have been referred to enforcement for further investigation. The review looked at several banking groups responsible for over 70% of the complaints firms receive and report to the FSA and over 60% of those resolved by the Financial Ombudsman Service (FOS).

It found poor standards of complaint handling within most of the banks assessed, including:
* A lack of senior management engagement and accountability for the delivery of fair complaint handling;
* Poorly designed staff incentive schemes that made branch staff reluctant to pay redress to customers, even in situations where the bank was at fault;
* Poor quality complaint handling by staff in branches and general call-centres leading to inadequate investigations, poor decision making as to the outcome of the complaint and unsatisfactory correspondence with customers;
* Complaint handling procedures that led to staff issuing multiple, repetitive responses to customers, forcing them to restate their complaint a number of times in the face of ongoing negative responses from the bank;
* The failure of banks to learn from previous complaints and to make changes to prevent similar complaints arising in the future.

Further information is available on the FSA's site here.

Promoting competition whilst balancing the Scottish public interest and consumer protection

GLC's briefing paper on the Stage 1 debate of the Legal Services (Scotland) Bill (Wednesday 28 April 2010):

We believe the Legal Services (Scotland) Bill is unable to deliver its stated policy aim of promoting legal services competition and, as drafted, is presently not fit for purpose. For the reasons set forth in this briefing, the Bill is highly likely to lead to serious detriment to Scottish consumers, the Scottish public and their legal system, and the independence of Scotland’s legal profession.

We believe the ‘external ownership’ principle in the Bill is conceptually flawed and unworkable, but may be able to be cured by substantial amendment. We would propose amending the Bill to replace ‘external ownership’ with a new form of licensed business practice which balanced the need to promote competition and innovation, with consumer protection and the Scottish public interest.

Our proposed principle of ‘co-ownership’ would comprise of non-legally qualified persons owning up to 25% of a licensed business practice, but working alongside qualified solicitors, with direct operational input to the business. This model would build upon a safe and robust, tried and tested regulatory system, while facilitating innovative new business arrangements and partnerships.

The full paper is available in PDF format here.

GLC to contribute to Lord Advocate's pro bono legal services in Scotland conference

The Lord Advocate, the Right Honourable Elish Angiolini QC, is hosting a special conference to explore how lawyers could best contribute to the provision of Pro Bono legal services; on Friday 14 May, Conference Room 1, Victoria Quay, Edinburgh, 9.30am; registration to probonoconference2010 (@)

The conference will showcase current provision of pro bono legal services in Scotland, encouraging participation and mapping out the future. GLC is a strong and active supporter of the progressive development of pro bono legal services in Scotland, and internationally, and we are delighted that our Principal Solicitor will address the conference.

Breaking news: Alternative Business Structures rejected at Law Society's SGM ...

The Scottish Law Agents Society's motion opposing the external ownership of Scottish law firms ('Tesco Law' or ABS) has been approved at a Special General Meeting of the Law Society of Scotland (LSS)in Edinburgh this morning, reversing the pro-ABS policy of the LSS. A proposed 'ABS lite' amended motion by McGrigors was rejected by Scottish solicitors. 1,817 votes were cast against ABS, with 1,290 in favour.

National regulator ‘with teeth’ needed to tackle Scotland’s dodgy landlords

Unscrupulous private landlords continue to operate with impunity and under the ‘radar’ of local authority registration schemes according to evidence from Govan and Govanhill Law Centres, submitted to the Scottish Government today, in response to its consultation paper on Scotland’s new Housing Bill.

Lindsay Paterson, solicitor at Govanhill Law Centre said:
“The very landlords who ought not to be landlords because they are not ‘fit and proper’ people continue to operate under the radar – they will never be refused registration or removed from the register as they will never apply to be registered. As things stand therefore, the private landlord registration scheme is not an effective way of ensuring those not fit to be landlords are stopped from renting out properties".

Govan Law Centre (GLC) has highlighted the major inconsistency of local authority resources deployed to private landlord registration schemes (PLRS) across Scotland.

GLC believes Scotland’s private rented sector needs a new national regulator with comparable resources as are available to the national regulator for social landlords in order to protect vulnerable tenants in the private rented sector. The current disjointed and under funded local schemes have failed to work.

GLC is calling for a new national regulatory agency with ‘teeth’, which should require all private landlords to undergo Disclosure Scotland checks in order to help establish whether they are ‘fit and proper’ persons to act as landlords. GLC is particularly concerned with the Scottish Government’s idea of giving private sector landlords the right to undertake ‘DIY evictions’ through a statutory abandonment process.

Mike Dailly, Principal Solicitor at GLC said:
“In our experience all too many private sector landlords routinely ignore the law, so to suggest they should be given the power to carry out a ‘DIY eviction’ in certain circumstances is extremely unwise. Govan Law Centre is concerned that such a power would be automatically abused with many vulnerable tenants and their families being summarily evicted at all hours of the day and night. The Scottish Government’s consultation paper has a lot of good ideas, but this is not one of them”

GLC’s full consultation response is available online here.

The Scottish Government's consultation paper is available online here.

Law Society election statement from GLC's Principal Solicitor

Elections to the Council of the Law Society of Scotland will take place on 12 May 2010 for solicitors within the Sheriffdom of Glasgow and Strathkelvin.

GLC's Mike Dailly is standing on a 'Justice for Scotland' platform, together with Frank Maguire of Thompsons, Walter Semple solicitor, and John McGovern, President of the Glasgow Bar Association (GBA). Below is Mike's personal statement (limited to 50 words) which will be circulated with the forthcoming ballot papers:

"We must reform our Law Society. Glasgow solicitors need proper representation. Better pay for criminal and civil legal aid so our citizens can access justice. Less bureaucracy and practitioner costs. No external ownership of Scottish law firms. I will work with GBA and Justice for Scotland colleagues to deliver change".

In order to improve access to justice we need to reform the Law Society of Scotland; to better serve the people of Scotland, and their solicitors. If you are a solicitor in Glasgow and are able to offer any help or support - or have any questions or issues you would like to raise - please feel free to get in touch with Mike at m(AT)

News Roundup: March 27 - April 2

HUD Kicks Off Fair Housing Month Declaring 2010 a "Time to Act"
In an April 1st press release, HUD highlighted its achievements from last year and proclaimed its continuing commitment to ensure Fair Housing for all in the year to come.

“Discrimination based on how you look, the religion you practice, or because you have children or are disabled is illegal and unacceptable,” said John TrasviƱa, Assistant Secretary for Fair Housing and Equal Opportunity at HUD. “In the aftermath of Dr. Martin Luther King Jr.’s assassination in April 1968, President Johnson moved for passage of the Fair Housing Act to bring the nation forward and together. Since then, we have made progress but there remains work to be done. It is time to act.” (Full Press Release Here)

Massachusetts AG Obtains Consent Judgment on Craigslist Advertisements
The judgment resolves allegations that a landlord made discriminatory statements in rental advertisements posted on Craigslist for including the phrase "no section 8." Such language violates the "source of income" provision in Massachusetts Fair Housing Statute, a provision notably absent from the Federal Fair Housing Act.

The case is "the result of a continuing statewide investigation by the Attorney General’s Office into reports of widespread discriminatory housing advertisements on the Internet." On October 28, 2009, the Attorney General’s Office reached 20 settlements and filed six complaints against landlords and real estate agents across the Commonwealth accused of violating state anti-discrimination laws on Craigslist.

“As more families face tough financial times and have no choice but to rent, landlords and real estate professionals must recognize that the rental market is a regulated industry and compliance with our anti-discrimination laws is an important obligation,” said Attorney General Coakley. “While we hope that this enforcement initiative will have a deterrent effect, our office will continue to monitor Craigslist and take action against persons and entities that violate the law.” (Full Press Release Here)

Are Emotional Support Dogs Protected by the FHA?
As is clear from the HUD press release, service dogs assisting persons with disabilities are usually covered by the FHA under the reasonable accommodation provision. Less clear however, is whether the FHA will protect residents from being forced to give up "emotional support" animals when private housing rules place limitations on pet ownership.

In Harford County Maryland, a father and daughter are fighting a condo association's determination that they must find another home for their dog because it exceeds the one dog only policy. The second dog, Jack, came into the family to assist the mother during her last few months to live while suffering from stage 4 colon cancer.

While such a case might seem to elicit sympathy, whether such circumstances demand the force of law seems unlikely. (Full Article Here)

JMLS to Host Fair Housing Law Program on April 16 and 17
The John Marshall Law School Fair Housing Legal Support Center is presenting the program "Fair Housing Law and Enforcement: A Basic Survey of the Law and Practice."

The cost is $300 and Attorneys can receive 10 CLE credits. To register contact Maria Chavez at (312) 427-9438 or (Full News-brief Here)