To Remedy Foreclosures State Appeals To Sub-Prime Lenders To Sign Compact

October 11th, 2007

Foreclosures have made the Ohio government sit up. It is difficult because no legal action can be straightforwardly taken. Governor Strickland is asking the leading sub-prime lenders to sign an agreement by which they will extend their services and other means to help those who are running the risk of foreclosures.

A press conference revolving around the foreclosure issue was held in the Statehouse. Strickland announced this compact titled Help Ohioans Preserve Homeownership. It consists of five segments one of which is about intensifying notification and providing help to house owners who are burdened with ARM loans or with debts that are more than the value of their properties. Twenty sub-prime lenders were invited to be part of this agreement, which however is not legally binding. Their comments about the foreclosure crisis and its solution were invited by 22^nd October. The formal signing would take place early in November.

The endeavour would tantamount to a public declaration of good intentions by the lenders who have been coming into a lot of criticism in this raging foreclosure storm. The Governor laid stress on the voluntary aspect without forgetting to mention that the path of legislation was always open if things reached a dead end.

Last month the Foreclosure Prevention Task Force of the governor, after a string of meetings and powwows gathered about 30 suggestions about putting a break on foreclosures. Ohioans battling the foreclosure tide have been repeatedly asked to seek counseling.

Ohio ranks among the top foreclosure offenders and continues to race ahead. Last year its average was twice that of the national figure says Policy Matters Ohio. Zurz, the chairperson of the task force, Richard Cordray the state Treasurer and Dough Garver representing Ohio Housing Finance Agency highlighted the concrete steps that are already underway. It includes a proactive approach, counseling sessions and financial assistance for those sucked in or about to go under foreclosures. The financial assistance would be in the form of loans backed by the state.

The compact stipulates contacting those lenders about to default, requiring lenders to give at least 6 months notice before increasing rates, trying to modify loans, reporting new sub-prime loans and modifications. Everything will be done with the one aim – avoid foreclosures. The compact will remain in force till 20010 or until 4 consecutive months record foreclosure decline.

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