Ohio Helps Homeowners Facing Foreclosure to Save the Dream

OhioNews Bureau

ONB COLUMBUS: What do Ohioans facing home foreclosure and Shakespeare’s legendary Prince of Denmark have in common? Both hope a dream can help them escape “the slings and arrows of outrageous fortune.”

For the growing tide of Ohioans facing home foreclosure “to sleep: perchance to dream: ay, there’s the rub” could be one way to keep their American Dream of owning a home alive long enough for circumstances to change sufficiently to allow them to tell the wolf of foreclosure that prowls outside their door today to go away.

One of Ohio’s chronic black eyes in recent years has been its high ranking in home foreclosures. The Mortgage Bankers Association, in its most recent report, says Ohio has the nation’s highest foreclosure rate.

Notwithstanding Gov. Ted Strickland’s forceful counter-punch to an Wall Street Journal editorial critical of Ohio’s economic performance when compared with that of Texas, the spreading pathology to communities resulting from the subprime lending crisis that’s done its damage in all parts of the state is not a matter to be taken lightly or swept under the rug.

OHIO TO HOMEOWNERS: DREAM ON

As a small antidote to counter the infection of borrowers getting in over their heads, the Ohio Department of Commerce (DOC) Thursday announced the launch of Ohio’s foreclosure prevention public awareness campaign – Save the Dream.

The Save the Dream campaign was developed by the Ohio Department of Commerce in cooperation with several state agencies and demonstrates a coordinated effort to combat Ohio’s higher foreclosure rate. The multi-media campaign is aimed at helping Ohioans take action to save their dream of homeownership.

“Foreclosure is devastating, not just to individuals and families, but to entire neighborhoods and communities. Unfortunately, many Ohioans facing possible foreclosure don’t know where to turn. The Save the Dream campaign directs Ohioans to the information and organizations they need to contact and work with to save their homes.” [Strickland, DOC media release]

Lt. Governor Lee Fisher and Director of Commerce Kimberly Zurz, who chaired the Foreclosure Prevention Task Force Strickland created last year to tackle the home foreclosure crisis, said the launch of the program is a partial down payment on their commitment to providing Ohioans with the information and tools they need to prevent foreclosures. Fischer said, “We are focused on doing everything we can to help Ohioans save the dream of homeownership.”

The campaign supports the number one recommendation in the Ohio Foreclosure Prevention Task Force’s report submitted to Governor Ted Strickland last year, an agency media release reported. The recommendation was for a public awareness campaign and borrower outreach events to encourage homeowners to contact their mortgage servicer if they are having trouble making their mortgage payment or are facing a reset of an adjustable rate mortgage.

Zurz said the Save the Dream Web site provides detailed information on the foreclosure process and highlights how Ohioans can take action to save their home.

“We strongly encourage Ohioans concerned about foreclosure to immediately contact their mortgage loan servicer, work with a HUD-approved housing counselor, and visit the Save the Dream Web site to learn more about foreclosure prevention.” [Zurz, DOC media release]

The Ohio Housing Finance Agency will be distributing nearly $3.1 million in housing counseling funds to 18 organizations around the state to increase the availability of foreclosure counseling and boost those organization’s services, according to Executive Director Doug Garver.

The core message of the Save the Dream campaign is for homeowners to 1) contact their mortgage loan servicer at the first sign that they may have difficulty in making their mortgage payment. Homeowners should explain their circumstances and ask to participate in a workout resolution. Even if the foreclosure process has started, it is not too late to reach out to the mortgage servicer; and 2) While working with the servicer, homeowners should contact a HUD-approved housing counselor to discuss their options. Information on HUD-approved housing counselors is available at www.hud.gov or by calling HUD toll free at (800) 404-4674.

HOME EQUITY LINK TO STATE, NATIONAL ECONOMY POTENT

As we’ve been told for years now, two-thirds of the American economy relies on consumer spending. A large part of that consumer spending in recent years was fueled by home equity. But that engine is faltering, as we learn from this post at Credit Slips showing that one in ten homeowners has no equity in the family home, and this post at Calculated Risk that shows estimated impacts on the economy from personal consumption expenditures that will be dampened by the decline in home prices (and values).

The new term for homeowners just giving up and walking away from their home because they owe more on it than its worth – “jingle mail” the sound an envelope makes when it arrives with the keys to some poor soul’s front door in it – is not to be dismissed lightly.

On the Sunday before Ohio’s primary election on March 4th, Sen. Hillary Clinton, speaking at her rally in Central Ohio, said Ohio’s home foreclosure crisis could result in $3.5 billion in reduced home values. As we all know, property taxes are based on home values, and if they drop, as is happening, the pain will be felt by schools, which are the largest beneficiaries of property taxes, and local governments, who capacity to deliver services will also suffer.

Interviewed by the OhioNews Bureau at the Democratic presidential debate in Cleveland, Ohio Treasurer Richard Cordray made his case for Ohioans being financially literate, so they can avoid the pitfalls of mortgage deals that are too good to be true.

One of Ohio’s black eyes is its leadership position in home foreclosures. Critics of mortgage brokers and the network of lenders and appraisers who they say conspired to dupe pie-eyed people who saw owning a home as proof positive they were one the road to achieving their version of The American Dream, say the lack of financial literacy played a big part in their gullibility to sign onto deals that were too good to be true.

Cordray agrees.

“Look at the mortgage foreclosure crisis and it shows right there,” he said of the need to have young adults become more financially literate when leave high school, so they’ll be better able to defend themselves against the wolves that await them when they enter the real world of money.

Cordray said “people allow themselves to be talked into or dream themselves into very bad loans. They have done that for the last several years, and I think people have no instruction in financial education. Either they’re maybe getting it at home, but many of them aren’t, or they’re learning from the school of hard knocks, and may care those mistakes around with them for years.” He said Ohio “cannot afford that any longer.”

THE OHIO MICHIGAN CONNECTION

Ohio and Michigan, being the fierce rivals in football that they are, share the same economic ignominy from loss of jobs and home foreclosures. The Save the Dream slogan was borrowed for use, with permission, from Michigan’s state housing development authority.

SAVE THE DREAM BASICS

The DOC said the program’s television and radio advertisements will run statewide from March through August, and that the ads, which will be mailed to advertising managers next week, can be viewed on the Save the Dream Web site. The $135,000 advertising campaign is being financed through the Ohio Real Estate Commission’s Education and Research Fund.

The Web site provides information on the foreclosure process, available resources in each county, tips on avoiding “rescue” scams, and answers to frequently asked questions. It also includes video testimonials from two homeowners who sought help from HUD-approved housing counselors to save their homes and an overview of what homeowners can expect when working with a counselor.

The campaign will be supported by the Save the Dream Hotline (toll free at 888-404-4674), located at the Ohio Department of Development. Ohioans who call the hotline will be asked a series of questions, and some calls will be forwarded to an approved housing counselor. Questions from callers who may require legal assistance will be e-mailed to Attorney General Marc Dann’s office.

BORROWER OUTREACH EFFORTS

Ohio’s borrower outreach efforts began last year, even before the task force’s final report and recommendations were presented, the DOC said. It sponsored six Borrower Outreach Day events in Akron, Cincinnati, Columbus, Nelsonville, the Toledo area and Youngstown. Moreover, the U.S. Department of Housing and Urban Development last year sponsored a Homeownership Preservation Clinic in Cleveland that was supported by the State of Ohio. The DOC said that more than 1,700 Ohioans have attended one of the borrower outreach events.

John Michael Spinelli is a former Ohio Statehouse government and political reporter and business columnist. He now serves as the OhioNews Bureau Chief for ePluribus Media Journal. Find ONB archives here.

If readers have a news tip or story idea about Ohio politics or government, contact the OhioNews Bureau at: ohionews@epluribusmedia.org

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