www.vindy.com/content/local_regional/299126981914288.phpGovernor is aiming to prevent foreclosures
Ohio had the highest
foreclosure rate in the
country last year.
By MARC KOVAC
VINDICATOR CORRESPONDENT
COLUMBUS — Gov. Ted Strickland is asking the state's top subprime mortgage lenders to sign a compact, pledging to provide the staff and other means to help at-risk borrowers avoid foreclosure.
During a press conference Tuesday in his Cabinet Room at the Statehouse, the governor unveiled his Compact to Help Ohioans Preserve Homeownership, a five-section agreement that includes increased notification and assistance for homeowners carrying adjustable-rate loans or mortgages in which the debt exceeds properties values.
Twenty subprime servicers have been invited to participate in the nonlegally binding agreement. Strickland said they can submit comments about the compact through Oct. 22; a formal signing ceremony will take place early next month.
"This would be a public declaration of intent on the part of the servicers," Strickland said, adding later, "It is better to have a voluntary, cooperative agreement, such as this compact. But, of course, legislation could always be an option if this does not turn out to be as helpful as we think it can be and will be through voluntary compliance."
The announcement was the latest in the state's efforts to deal with growing foreclosure and delinquent-loan issues.
Ohio had the highest foreclosure rate in the country last year, at more than twice the national average, according to a study by Policy Matters Ohio.
Last month, the governor's Foreclosure Prevention Task Force, after months of meetings, assembled nearly 30 recommendations for stemming the tide, including providing increased counseling to Ohioans struggling to keep up with mortgage payments.
Kimberly Zurz, department of commerce director who served as chairwoman of the task force, state Treasurer Richard Cordray, and Doug Garver, executive director of the Ohio Housing Finance Agency, outlined efforts already under way to help homeowners, including outreach and counseling sessions and state-backed loans for those at risk.
The compact would be signed by Strickland, Zurz and any willing residential mortgage servicers, who would agree "it's in their individual and collective best interests to prevent or at least diminish the expected substantial increase of subprime mortgage foreclosures in Ohio" and that "it is also a matter of good public policy to keep willing and able Ohioans in their homes."
The compact outlines various means for subprime lenders to assist affected borrowers, including:
Identifying and contacting homeowners who are at risk of default, including monthly notification of interest rate increases at least six months in advance of an adjustment.
Where applicable, modifying loan terms "to provide permanent, affordable relief to Ohio borrowers."
Regularly reporting to the state information about subprime loans issued, modifications to such loans and delinquency and foreclosure rates.
The compact would remain in effect through the end of 2010 or until average foreclosure filings decline for four consecutive months.