How to get help
Victims of unfair or deceptive loan modification practices may contact the Attorney General's Office at (800) 282-0515 or SpeakOutOhio.gov.
For assistance with loan modifications or help in a foreclosure situation, contact Save the Dream at (888) 404-4674 or SaveTheDream.ohio.gov.
DAYTON — Recordbreaking home foreclosure filings and delinquency rates show that of 1.478 million loans serviced statewide, 15.3 percent or 226,140, are in foreclosure or have payments that are past due.
That’s up from 13 percent from the first quarter and 14.3 percent from the second quarter. “Our foreclosure crisis is not easing, it’s growing,” said Bill Faith, executive director of The Coalition on Homelessness and Housing in Ohio.
Alfred Patterson, community outreach coordinator for County Corp., the economic development arm of Montgomery County, said his program over the past three months through October has worked with 113 homeowners and resolved 62 loans.
In those cases, the client was kept in the home through a loan modification or left the premises under agreeable terms. Other cases are pending and two are in sheriff’s sales.
For Steven Pitman, whose old farmhouse on Grange Hall Road in Beavercreek sits next to the bike trail, his mortgage payment of $576 has now jumped to $1,111 at 6.75 percent interest, according to a letter he received Nov. 18.
“Holy cow,” Pitman said. He wants the banks to modify their piled-on fee demands. He’s lived in his house 30 years and is still there with his 22-year-old son.
Pitman said threatened homeowners should stick to their guns, stay in their homes — and force banks to work with them.
Patterson said that while a few lending institutions are slowly improving their response to homeowners, others remain difficult, including Litton Loan, Select Portfolio Servicing and American Home Mortgage Servicing Inc., a Texas-based company handling more than 12,000 sub-prime and prime mortgage loans in Ohio.
Litton said that since April, it has offered more than 2,200 trial modifications to customers in Ohio. Select Portfolio did not respond to a request for comment.
American Home is the target of a lawsuit by Ohio Attorney General Richard Cordray that alleges violations of the Ohio Consumer Sales Practices Act.
Those violations include incompetent and inadequate customer service, failure to respond to requests for assistance, failure to offer timely or affordable loss mitigation options to borrowers and unfair and deceptive loan modification terms, according to the lawsuit.
“For far too long there has been little to no accountability for those who take advantage of the dire circumstances of home foreclosure,” Cordray said. “The acts of some mortgage servicers have gone beyond the point of being negligent — they have become predatory financial practices and in Ohio, they won’t be tolerated.”
According to the lawsuit, American required loan modification agreements that forced consumers to pay excessive fees and waive their rights to get help. The suit also alleges that terms of loan modifications were “unconscionably one-sided in favor of American.”
American issued a statement Nov. 5, saying it was “dismayed” by Cordray’s allegations and said they were “entirely without merit.”
In July, Cordray sued loan servicer Carrington Mortgage Services, LLC.
Montgomery County Court judges are examining how a mediation program there might play a role in the crisis. In a typical mediation, a mediator negotiates in an informal and friendly way with separate parties to arrive at a mutually agreeable solution. It can be a homeowner’s last lifeline to keeping their property.
A key issue is targeting whom to help, Montgomery County Administrative Judge Michael T. Hall said. That means distinguishing between speculators who got in over their heads with risky loans from those who live in owner-occupied dwellings, he adds, “trying to help the people who count.”
Since the beginning of the year through October, the court has referred 40 foreclosures to mediation, a small fraction of the estimated 5,000 foreclosure filings expected this year in the county.
A meeting is scheduled for Dec. 10 for a court task force that includes representatives of Legal Aid, Miami Fair Housing and UD’s law school, Hall said.
Beth Deutscher, executive director of the Home Ownership Center of Greater Dayton, said her program has counseled 1,575 clients this year.
The numbers continue to grow and many are unemployed, she noted. She said the center has documented 864 clients able to avoid foreclosure. Of those, 306 received mortgage loan modifications, 211 were able to bring their mortgage current, sometimes with assistance from rescue loan or grant programs, and 77 were able to refinance.
The process is excruciatingly slow from her standpoint as banks and other servicers don’t seem to be in any hurry.
“They are moving really, really slowly,” Deutscher said. “As the clock ticks, that person’s mortgage gets further and further behind. In some cases it goes into foreclosure. We would love to see some enforcement and guidelines established that (mortgage) servicers have to follow. No one is really monitoring those practices in the way you think of a bank being regulated. That is why you are seeing lawsuits and people up in arms.”
Under President Obama’s Making Home Affordable program, Deutscher said she has only arranged one modification despite dozens of applications. The Associated Press contributed to this report.
About the Author