Troubled homeowners in Ohio can avoid foreclosures by participating in a foreclosure prevention program partially financed by Ohio Attorney General Richard Cordray. Similarly, distressed mortgage borrowers in Nevada can get help from U.S. District Court Judge Kent Dawson.
Attorney General Cordray allocated $1 million to several local agencies in Ohio providing foreclosure counseling services to homeowners. Local agencies were encouraged by the new funding as cutbacks in federal funds were slowing them down in their operations.
Among these local foreclosure prevention agencies is Empowering and Strengthening Ohio’s People, which has helped around 8,000 homeowners save their homes from foreclosure this year. According to ESOP executive director Mark Seifert, without additional funding, the agency would not be able to help the same number and might only help around 5,000 borrowers in 2010.
Another foreclosure counseling agency is Community Housing Solutions in Cleveland, headed by Andy Nikiforovs who said that the funding would prevent the agency from laying off staff.
Local agencies said that their counseling services need to be supported because they have been vital in helping a lot of distressed homeowners avoid foreclosures. According to a study from the Cleveland State University, more than 50 percent of mortgage borrowers in Cuyahoga County that received counseling from foreclosure prevention organizations were able to save their homes from foreclosure.
The study showed that the success rate in the county was twice the success rate reported by other foreclosure prevention programs in other areas. However, according to Paul Bellamy, head of Cuyahoga’s foreclosure prevention program, a drastic drop in federal funding for programs in Ohio will adversely affect their capability to provide needed counseling and assistance.
Since 2007, Congress has already provided two allocations of $180 million each for foreclosure counseling programs and a third allocation of $50 million. A fourth allocation of around $65 million is being considered.
In Nevada, Judge Dawson upheld a ruling made by bankruptcy judge Linda Riegle, preventing the Mortgage Electronic Registration Systems from foreclosing on properties they do not own. Riegle required MERS to show actual mortgage notes or documents proving that they are agents of the lenders before they can foreclose on defaulting properties.
In his affirmation, Judge Dawson stated that MERS, which was launched to help the mortgage industry record and monitor residential mortgages, must show evidence that it owns the mortgage or that it is an agent or legal representative of the lenders before pursuing foreclosures. Homeowners then in Nevada can use this argument to help them avoid foreclosures.