Virginia Foreclosures - Governor Kaine In Virginia Worried About Foreclosures

Governor Kaine In Virginia Worried About Foreclosures

February 28th, 2008

Governor Timothy M. Kaine (D) took the initiative to introduce in the General Assembly regulations against high risk mortgages in an attempt to stem the tide of foreclosures. In the next two years thousands are at risk of losing their houses. The aim is to give them a grace period to grapple with the problem and try and find out some alternatives. It is hoped that proper counseling and time will show results and the foreclosure numbers might be halted. Kaine is hoping that the General Assembly will approve of it before it adjourns on 8th March. The Governor of Maryland Martin O’Malley (D) took similar steps about a week ago.

The legislation will rule that lenders engaged in high-risk mortgages will have to give a 10 days notice to the borrowers about change of interest rates. The lender will also have to connect the borrowers with three counseling agencies and also grant 30 days grace period before proceeding with foreclosures. The proposed legislation has the support of many banking lenders as well as representatives of the consumers.

According to reports from a mortgage firm the number of foreclosures jumped by 57% in January 2008 from what it was in the same month a year ago. Another organization, The Center for Responsible Lending opines that before the mortgage wave exhausts itself out as many as 62,174 houses will be swallowed up by Virginia Foreclosures. Virginia has the highest rate of foreclosures in the country. In some cases the borrowers can lose their houses in as short a time as 30 days after having missed a payment. Credit counseling can avert the imminent danger. In fact about 70% of those who opt for mortgage counseling have been able to keep their houses. It is encouraging to note that the governor himself has realized the gravity of the situation. Last year Kaine had set up a task force – Virginian Foreclosure Task Force, consisting of representative from the industries, consumers, policy personnel and researches. The first recommendation of this task force has led to the tabulating of the bill in the General Assembly. Other recommendations are coming forth from the group.

The accusing finger points to the aggressive peddling of risky sub-prime loans with teaser rates that has led to the foreclosure crisis of today. It is imperative that borrowers are protected for sake of the general socio-economic health of the society.

Via