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Strickland, mortgage companies sign foreclosure compact
Monday, April 07, 2008
COLUMBUS — Nine mortgage loan servicers have signed non-binding compacts with the state in what Gov. Ted Strickland called a first-in-the-nation effort to keep homeowners out of foreclosure.
"I think today is an historic day in the state of Ohio," Strickland said Monday, April 7, at a Statehouse news conference. Bill Cosgrove, president of the Ohio Mortgage Bankers Association, and representatives of six of the loan servicers joined Strickland.
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About 55 percent of Ohio home loans are with the nine companies, Kimberly Zurz, state Commerce Director said.
The compacts are based on six principles:
•Engage in substantial and large-scale loan modification effort for adjustable rate mortgage resets and subprime mortgages.
•Identify, evaluate and make good faith attempts to contact at-risk or defaulting borrowers as soon as possible.
•Modify loans to the extent permissible within existing fiduciary, contractual or other legal obligations and in accordance with prudent mortgage lending and servicing practices.
•Create incentives for staff and foreclosure counsel to modify loans rather than foreclose.
•Report progress to the Commerce Department.
•Enter into a non-binding agreement with the state for a defined period of time — with agreements extending to June 30, 2009.
The companies signing the compacts are:
•Carrington Mortgage Services
•Citi
•GMAC RESCAP/Homecomings Financial
•HSBC Finance Corp.
•Ocwen Financial Corp.
•Option One Mortgage
•Saxon Mortgage Services
•Select Portfolio Servicing
•Litton Loan Servicing
Cosgrove declined to comment when asked if the companies would have signed had the agreements been binding, with sanctions for violations.
Strickland said the companies have put their "honor and prestige on the line."
"No one said the Declaration of Independence was legally binding but a lot of people paid attention to it," Strickland said, quoting his legal counsel Kent Markus.
The loan servicers and their trade association had balked at Strickland's earlier, more detailed proposal for a compact, announced Oct. 9, 2007.
The new compacts are part of the state's "Save the Dream" program that is aimed at helping Ohioans facing foreclosure. For information, call 1-888-404-4674.
Contact this reporter at (614) 224-1608 or whershey@DaytonDailyNews.com.
