Late last month President Barack Obama announced his administration’s latest initiative for tackling the country’s unrelenting foreclosure crisis. One and a half billion dollars will go to assist states that have experienced the greatest decline in home values to develop programs to help homeowners avoid foreclosure. These programs are sure to include incentives to lenders for modifying loans, a central component of the administration’s existing Making Home Affordable Program.

[IMGCAP(1)]Providing incentives to lenders to alter loan terms will undoubtedly help families keep the roof over their heads. But a comprehensive approach for addressing the foreclosure crisis requires both a carrot and stick approach.

We are in this mess in no small part because of irresponsible lending practices that many lenders either explicitly condoned or willfully ignored. Some of the more predatory and abusive practices — disproportionately targeted to low-income and minority communities — were illegal.

Despite this reality, the overwhelming majority of homeowners facing foreclosure do so without legal assistance, according to a recent Brennan Center for Justice study. As a result, wrongdoers are rarely held accountable for their misdeeds.

In Connecticut, 60 percent of defendants facing foreclosure did so without counsel. In Stark County, a hard-hit county in Ohio, that figure was 86 percent; and in Queens County, N.Y., for homeowners in proceedings involving high-cost and subprime loans, it was as high as 84 percent.

These homeowners may have been victimized by unsavory lenders or by those engaged in mortgage fraud schemes. Without the threat of legal action, mortgage companies may have been particularly recalcitrant and unwilling to renegotiate loan terms. And families may have just needed an advocate in court to help scrutinize foreclosure filings for mistakes.

For most, however, the inability to pay for an attorney put legal assistance out of reach as there are not enough no- or low-cost publicly funded attorneys to meet the demand.

The economic collapse didn’t cause this shortage, but it has exacerbated it. Even before the recession, more than 80 percent of the legal needs of the poor went unmet. That’s part of the reason lots of families got duped into bad mortgages in the first place.

This isn’t just the result of simple economics. Little-known federal restrictions placed on the Legal Services Corporation in the mid-1990s limit the type of representation that homeowners and others with civil legal cases may receive from lawyers in programs that receive federal funds. For example, lawyers in LSC-funded programs cannot bring class action suits and thus must challenge illegal and widespread practices on an inefficient case-by-case basis. They have also been prevented from initiating legislative advocacy on behalf of communities that are in dire need of changes in lending policy, notably a restriction not applied to the banks who received government bailout money.

The federal restrictions further burden the poor and undercut their counsel, who already do not have sufficient resources to meet the growing demand for assistance.

The resulting inequity is galling. Lawyers for mortgage lenders and banks rely on a full arsenal of legal tools to pursue homeowners, while homeowners on the receiving end of foreclosure proceedings often have no choice but to go it alone. And even when homeowners are represented, their lawyers must fight with one hand tied behind their backs

The first needed fix is simple: more funding for foreclosure legal assistance. Additional federal dollars should be dedicated to foreclosure legal assistance. State legislators need to step up to the plate as well. California saw fit to enact the Sargent Shriver Civil Counsel Act to provide legal assistance in high-stakes civil proceedings to low-income people in select jurisdictions, even in the face of that state’s severe budget challenges. Other states should follow suit.

Congress must also lift the federal restrictions that impede delivery of legal services for the poor. The passage of legislation this past December lifting the restriction on LSC-funded attorneys’ ability to collect statutorily authorized attorneys’ fees was an important first step. But Congress should go further and remove the remaining burdensome federal constraints on legal aid providers’ use of nonfederal funds. This year’s LSC appropriation bill presents a ready vehicle.

When families have no legal representation, lenders are free to act with impunity. When they do, it damages not only foreclosed homeowners, but the rest of us as well.

Melanca Clark is an attorney at the Brennan Center for Justice at New York University School of Law and author of “Foreclosures: A Crisis in Legal Representation.”