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November 2007

Task Force Addresses Growing Forclosure problem

Ohio leads the nation in the proportion of mortgages that are seriously delinquent or in the foreclosure process (5.22 percent) according to the Mortgage Bankers Association National Delinquency Survey. The survey also found that Ohio's percent of subprime Adjustable Rate Mortgage (ARM) loans over 90 days past due or in foreclosure is 22.9 percent - almost twice the national average.

Those facing foreclosure in Ohio range from people who recently purchased a home to long-term owners. Loss of income and medical problems are frequently a precipitating factor, compounded by a recent increase in the numbers of borrowers in adjustable rate mortgages facing interest rate resets. Over the next five years, $1 trillion in adjustable rate mortgages are expected to reset nationally, including an estimated $14 billion in Ohio.

A family coping with foreclosure faces not only the loss of their home, but also damaged credit, which may affect their opportunities to borrow money at a reasonable interest rate for years to come. Damaged credit may even restrict employment opportunities and the ability to rent. The emotional strain can be just as serious as the economic strain.

The broader impact of foreclosures on a community is equally troubling. Foreclosures affect the value of surrounding properties, and may impede others from selling their own homes even though they have been faithfully making all of their mortgage payments. A community with multiple foreclosures generates less property tax revenue to support all aspects of local government such as schools, social programs and fire and safety services.

Governor Strickland created the Ohio Foreclosure Prevention Task Force to develop a new state approach and to develop innovative strategies to help many people avoid foreclosure.

The Task Force developed 27 recommendations, organized under seven themes:

• Encourage Borrowers to Get Help Early
• Expand Housing Counseling and Intervention Services
• Work with Lenders and Servicers to Maximize Alternatives to Foreclosure
• Provide Options for Homeowners to Refinance or Restructure Their Mortgages
• Improve Ohio's Foreclosure Process
• Strengthen Protections for Homeowners
• Help Communities Recover from the Aftermath of Foreclosures

Review the Ohio Foreclosure Prevention Task Force's Final report...

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