August 8, 2008
Update: Ohio foreclosure crisis
~ written by Stephen Grenier
I returned from the “Supreme Court Roundtable on Foreclosure Mediation” last June excited and disheartened. Excited by the success foreclosure mediations are having by keeping families in their homes. Disheartened – as many courts still have no a foreclosure mediation program.
Ohio ranks in the top six worst hit states facing foreclosures with over 153,000 foreclosures filed in 2007. The Mortgage Bankers Association has reported that the rate of foreclosure starts and the percent of loans in the process of foreclosure are the highest recorded since 1979. Cuyahoga and Franklin counties are seeing a 75%-90% increase in foreclosure filings over the last year for all homes across all demographics. (I’m mediating foreclosures on homes worth up to $500k so far.)
“Save the Dream” is Ohio’s effort from Governor Strickland’s Foreclosure Prevention Taskforce in 2007. The Governor negotiated with nine mortgage servicers who signed the “Compact to Help Ohioans Preserve Homeownership.”
Ohio Supreme Court Chief Justice Moyer urged (February 5, 2008) Ohio Judges to customize and implement a pre-packaged Foreclosure Mediation Model that was complete with templates for court rules, sample forms, free training and implementation assistance to achieve the goal of giving “individuals involved in foreclosure cases the same access to mediation that has been regularly provided in other types of civil cases for over a decade”.
How is the legal community responding? Many Ohio counties have yet to implement a foreclosure mediation program. Meanwhile, homeowners are being forced out of their homes, every day, at alarming rates.
The Ohio Supreme Court Dispute Resolution department has trained over 275 attorneys and mediators, representing 46 of the 88 Ohio counties, in classes across the state. Cuyahoga County just installed its program requiring the lender to appear in person for mediation. Delaware County (where I primarily practice) announced its foreclosure mediation program in March. Both Common Pleas judges, Krueger and Whitney, are strong advocates of the program and are experiencing great success. Delaware County, comprising Delaware, Powell, Lewis Center, Galena and Westerville, has been the fastest growing county in Ohio since 2000 and has one of the highest percentages of foreclosure filings.
Job and Family Services is among the best referrals to home owners. In the last two months in Delaware County alone, sixteen families have received over $35,000 in assistance paid by the Delaware County Job and Family Services directly to the lender to avoid foreclosures.
At the roundtable, there was a collective excitement that many foreclosure Mediations are resulting in a “workout”. Homeowners are keeping their homes, which is the ultimate goal. We are seeing one of three primary outcomes; a Forbearance Plan; a Mortgage Modification; or a Deed in Lieu of Foreclosure (where the homeowner surrender’s the home but negotiates the move out date, amount of 1099 income reporting, and the amount of deficiency.)
As an Ohioan, I’m glad to see this State and Supreme Court rise to the occasion to help Ohioans “Save the Dream.”
From Franklin County Common Pleas:
The Court is reviewing the model program presented by the Supreme Court; and the foreclosure committee, chaired by Judge Stephen McIntosh, is working to implement some form of foreclosure mediation using not only the Supreme Court plan, but looking at other programs with the idea of assisting ownership, while studying (noting) existing restrictions on judicial intervention.