Ohio - All Set to Combat Foreclosure

September 17th, 2007

A special task force in Ohio, Columbus, has come up with a few suggestions to help house owners overcome the ongoing foreclosure crisis. They recommended that the loan agreements should be streamlined in a more flexible way, by the subprime lenders, to suit the needs of the delinquent homeowners. Moreover, financial counseling should be given to the homeowners, and for this, the state should come forward and participate actively by giving monetary support.

In Ohio, a task force called as ‘The Ohio Foreclosure Prevention Task Force’ exclusively works for foreclosure related woes of the homeowners. Strickland formed this special task force of the state in March which includes government officers, financial experts and representatives of non-profit organizations. It is believed that apart from Florida and California, the rate of foreclosure is higher in Ohio than any other state. The task force has put forward 27 recommendations in front of government leaders and lawmakers of the state.

Keith Daily, spokesman of the Gov. Ted Strickland, informed that the governor will go through the report as early as possible, and all the realistic approaches will then be adopted to curtail the mounting foreclosure issues.

Between January and July in 2007, 44,560 homeowners lost their homes to foreclosure. This rate is the highest in the state more than the national average records, for every quarterly report since December of 1998. It is projected that in the next five years in Ohio, approximately $14 billion in adjustable rate mortgage can potentially be reset.

The task force has also put forward a proposal of conducting public awareness campaign in front of the state. If accepted, then such programs will encourage homeowners to contact lenders in case there is any change in the monthly interest rate, or if they have any monetary problem, as early as possible. Their proposal also includes one, where in case the rates of the subprime loans are going to be re-adjusted to higher values, then at least six months advance notice should be given to homeowners of adjustable-rate-mortgage loans.

Another piece of advice that has come up from the task force is that a request should be made to the lenders to convert the interest rate loans to a fixed-rate loan from the initial adjustable rates, and to excuse the penalties on attorney’s fees as well as on the late charges. Not less than $2 million from the state funds and $10 million in general should be donated to housing counselors, so that they can take preventive measures against foreclosure.