A moratorium on foreclosures, and other mortgage aid, proposed in Ohio
A bill that is currently before the Ohio House and state government that is calling for a six-month moratorium on foreclosures makes sense in the current economic crisis, and should help the Ohio economy.
The bill that is being put together by Rep. Mike Foley, D-Cleveland, would allow much more flexibility is stopping foreclosures, and would allow a judge to reduce the amount a homeowner owes on a mortgage, lower their payments, and especially if the current loan is higher than the value of the home. The measure before the house would not stop foreclosure actions against vacant property; it requires increases in the notification requirements on foreclosures to 60 days; calls for setting up a state database to track the holders of mortgage agreements and loans; and it also allows homeowners to rent after a foreclosure until the home or property is sold.
Still to come. The bill faces hearings in the House, hearing possibly before the Financial Institutions, Real Estate and Securities Committee. In addition, the Republican-controlled State Senate should pass similar mortgage help and foreclosure legislation.
As an example of the current problems, Lorain County showed a 10 percent increase for January foreclosures. A total of 226 were filed in 2009 as compared to 203 in 2008. Lorain County Clerk of Courts Ron Nabakowski also wholeheartedly supports a moratorium on foreclosures. He expects foreclosures to rise with the higher unemployment numbers. Reforms to foreclosure laws are also already being considered in Congress in Washington.
What can aid the housing industry is that homeowners need fairness and the ability to negotiate directly with lenders and servicers. Giving courts and judges more leeway in foreclosure cases seems a reasonable move. Also Financial institutions and banks can also benefit if homeowners can continue to make payments on their homes, keep their loans current, and this is better than rather than have the property sold at the local sheriff's auctions.
The Ohio Senate and House need to work together to provide for foreclosure relief. Calling for a six-month freeze, moratorium, or time-out on mortgage foreclosures looks to be a good first step to solve the housing crisis.
Click here to speak to a housing counselor to learn more about this moratorium and other options.