Ohio Mortgage Taskforce Meets to Focus on Foreclosures

The state’s Foreclosure Prevention Task Force held its fourth meeting this week, in what was billed as an opportunity for Ohio mortgage borrowers facing foreclosure or people who’ve been through the foreclosure process to tell their stories.

Instead, almost all of the 21 speakers who signed up were officials from agencies that represent borrowers or businesses involved in mortgage lending – and all had an opinion on how to stem foreclosures in Ohio, which rose 24 percent in 2006.

Mark Lawson, a senior attorney for the Legal Aid Society of Southwest Ohio, told the panel that his organization has so many people calling for help with mortgage-related problems that it can’t begin to handle them all.

“This is an epidemic. You think it’s bad now? You have a tsunami of foreclosures on its way,” said Tom Conley, a self-described foreclosure intervention specialist from the Columbus housing market who said he went through a foreclosure a year ago.

Investor seminars are being offered around the country teaching people how to profit from people saddled with overvalued houses and home mortgages they can’t afford, Conley warned.

Gov. Ted Strickland set up the task force this spring to foster foreclosure prevention, as well as intervention and strategies to assist distressed mortgage holders. The task force includes representatives from local governments, home loan lenders, non-profit sector and private sector.

Lawson cited one example of an unidentified woman who bought a two-family house in 2005 with an adjustable-rate mortgage that started with an interest rate of 9.5 percent. The property was appraised at $130,000, although an earlier appraisal put its value at only about $70,000. She bought it on the recommendation of a real estate agent who, Lawson later discovered, was an owner of the company that arranged the mortgage.

The loan included $15,000 for repairs necessary to make the second unit rentable, which the real estate agent contracted to perform himself, Lawson said. The repairs were never completed, and the woman will probably have to give up the property.

Many of the people testifying before the task force urged the panel to provide consumer education and funding for professional assistance for distressed borrowers, people who have little or no chance of successfully negotiating a solution on their own, they said.

“That’s a ludicrous proposition to expect homeowners to work with lenders,” said Jim McCarthy, president of Miami Valley Fair Housing Center Inc. in Dayton. He cited one example of a mortgage his organization was able to rework for a client that took 124½ hours of staff time.

Prior to the full panel’s hearing, at a meeting of a subcommittee on responsible lender options, members discussed how to institute an expedited foreclosure process for vacated and investor-owned properties. They were told that the average foreclosure in Ohio takes more than a year to complete – and that many result in abandoned buildings that attract criminal activity and end up being worthless.

The subcommittee is looking into ways to offer an expedited foreclosure process to lenders who agree to certain conditions, including the conversion of mortgages to fixed rates, new appraisals to reflect properties’ true market value, and a write-off or write down of payments in arrears.