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Cordray, National Working Group Release New Foreclosure Report
1/20/2010
(COLUMBUS, Ohio) — Foreclosure numbers will get worse before they get better, according to findings released today by Ohio Attorney General Richard Cordray and the State Foreclosure Prevention Working Group, made up of 10 other state attorneys general.
“The data shows that one in seven borrowers is behind in their mortgage,” said Cordray. “And hundreds of thousands of homeowners have adjustable-rate mortgages waiting to reset, ultimately sending even more into default. As our report outlines, servicers are long overdue to step up and start taking legitimate steps in reducing foreclosures. If they choose not to, the picture is grim.”
The data compiled in today’s report is the result of a two-year study by the working group in cooperation with 13 of the largest servicers of subprime mortgages.
The 20-page report brings to light the following findings:
•The total number of struggling homeowners not on track for any foreclosure prevention assistance continues to grow. Only four out of ten seriously delinquent borrowers are involved in loss mitigation efforts.
•Both loss mitigation and foreclosure efforts appear backlogged.
•Most modifications result in payment reductions but principal reductions remain rare.
•Prime loans are increasingly driving the rising delinquency rates.
“We’ve found that more and more loans in foreclosure are conventional prime loans rather than exotic subprime loans,” said Cordray. “As foreclosures impact a larger and larger part of society, it is even more important that servicers and investors offer long-term sustainable solutions.”
In the report, the group makes a number of recommendations to combat the next wave of foreclosures, specifically addressing principal reduction in loan modifications, more transparency in the federal Home Affordable Modification Program and expanding housing counseling or mediation measures.
To read the report in full, visit www.OhioAttorneyGeneral.gov/ForeclosureReportJan2010.
The Working Group was established in summer 2007 to work with servicers of subprime mortgage loans to identify ways to prevent unnecessary foreclosures. The Working Group has issued three previous “Data Reports” starting in February 2008 (available at the web site of the Conference of Bank Supervisors – www.csbs.org.)
Ohioans who need assistance with loan modifications or help in a foreclosure situation should contact Save the Dream at (888) 404-4674 or www.SaveTheDream.ohio.gov.
Media Contacts:
Kim Kowalski: (614) 728-9692
cell: (614) 893-6018
Ted Hart: (614) 728-4127
cell: (614) 743-2286
Source: OHIO AG
