Governor Strickland announces nine mortgage loan servicers sign compacts to assist Ohioans in avoiding foreclosure

Ohio Gov. Ted Strickland today (Monday, April 7) announced that nine mortgage loan servicers agreed to sign a “Compact to Help Ohioans Preserve Homeownership,” the first agreement of its kind in the nation.

Executives from six mortgage loan servicers signed a document pledging that they will work with the state in making every possible attempt to prevent default loans and foreclosures in Ohio. Executives from three other companies mailed signed copies.

“Home ownership is the very foundation of the American dream,” Strickland said. “I am very encouraged that these loan servicers have stepped forward and pledged to follow the common sense principles we outlined in our compact. These steps will reduce foreclosures in Ohio and bring stability to the families and communities affected by this crisis.

“At the same time I would urge all Ohioans facing possible foreclosure to contact your loan servicer immediately to discuss your financial situation or call the State of Ohio’s Save the Dream Hotline. It’s a call that can help save your home,” Strickland said.

The loan servicers that signed a compact are:

Carrington Mortgage Services; Citi; GMAC RESCAP/Homecomings Financial; HSBC Finance Corp. ; Ocwen Financial Corp. ; Option One Mortgage; Saxon Mortgage Services; Select Portfolio Servicing; and Litton Loan Servicing

The six principles agreed to by the loan servicers include a willingness to:

1. Engage in a substantial and large-scale loan modification effort for adjustable rate mortgage resets and subprime mortgages.
   
2. Identify, evaluate and make good faith attempts to contact at-risk or defaulting borrowers as soon as possible.
   
3. Modify loans to the extent permissible within existing fiduciary, contractual or other legal obligations and in accordance with prudent mortgage lending and servicing practices.
   
4. Create incentives for staff and foreclosure counsel to modify loans rather than foreclose.
   
5. Report progress to the Ohio Department of Commerce.
   
6. Enter into a non-binding agreement with the State for some defined period of time. (The agreements extend to June 30, 2009.)

The agreements follow the governor’s proposed “Compact to Help Ohioans Preserve Homeownership” announced in October 2007. At that time, the governor asked the servicers to review the proposed compact and submit any comments.

In November 2007, after the response to his proposal primarily came from their trade association and not from the individual servicers, the governor announced that the response was inadequate and that nothing meaningful had been offered. He said he was open to talk with the individual servicers.

Kimberly Zurz, director of the Ohio Department of Commerce and chair of the governor’s Foreclosure Prevention Task Force, met with many servicers and their trade associations. At that meeting, the representatives discussed the proposed compact and agreed on the six principles, which substantively matched the spirit of the original compact.

After extensive negotiations in recent months, the servicers expanded upon the six principles, which led to today’s agreement.

“We are pleased that these servicers have joined in signing a compact,” Director Zurz said. “I hope that even more servicers will join their colleagues and the State of Ohio in this good faith effort to help Ohioans stay in their homes.”

Ohio’s Save the Dream hotline number is 1-888-404-4674 or visit http://savethedream.ohio.gov/.

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California REALTORS approve plan for statewide database and MLS

Directors for the California Association of REALTORS have approved the creation of a statewide real estate data-sharing effort that local REALTOR associations could choose to use as a statewide multiple listing system.

"It gives us the opportunity to get all of the data throughout the state into one database and then allow associations and MLSs to decide whether they want to use it as their MLS database or use it just as the aggregation portion," said Gary Thomas, a real estate broker who is a former CAR president and leader of the MLS Working Group that was appointed in 2005 to study MLS issues and develop a vision for the state's system of MLSs.

The CAR motion provides that a mutual benefit non-profit corporation will be established to oversee the development and operations of the database and statewide MLS system.

Also, directors voted to establish:

1. An MLS rules working group to recommend statewide rules to be used in either model;
2. An MLS statewide governance working group to recommend a specific governance structure;
3. An MLS standards subcommittee group to recommend data standards;
4. And an association executives working group to recommend the most efficient and member-oriented approach on which services should be retained at the local level.

Those groups will report back to the association's directors in January for review and approval of their recommendations, he said.

Decision makers haven't determined yet whether CAR or an outside entity would operate the statewide database and MLS system, Thomas said.

Thomas said that the statewide initiative is intended to build upon other efforts in the state. "We would want to utilize what's been started by (several groups)--and look to all of those to get it put together as rapidly as possible." He added, "There are lots of decisions to be made between now and when it's implemented."

Fees for the statewide aggregated real estate database and MLS would be paid by members of local associations that choose to participate in the statewide efforts.

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Legal issues

Craigslist not liable for FHA violations...The classified advertising site Craigslist wasn't liable for postings that allegedly violated the Fair Housing Act because the Web site isn't a 'publisher' of statements discriminatory posted by third parties, ruled the United States Court of Appeals for the Seventh Circuit, affirming the trial court decision.

Legal Podcast: Loan Assumptions...Attorney Howell Haunson describes this increasingly prevalent type of transaction and the possible risks in the latest podcast from NAR Legal Affairs. .

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Subprime exposure decreases nationwide

Home owners are refinancing and moving away from risky subprime loans, an analysis by NAR Research shows. The percentage of subprime mortgages in the fourth quarter of 2007 dropped by 50 basis points from the previous quarter, to 12.7 percent of all mortgages. Year-over-year, subprime mortgages declined by 100 basis points, from 13.7 percent to 12.7 percent. These trends along with an increase in mortgage originations reported by the Mortgage Bankers Association suggests the market could see a decrease in subprime exposure later this year. For the short term, though, foreclosures are expected to rise through the summer.

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Commercial...New offices could spur vacancies in some markets

The office market on a nationwide basis has seen little over-building, but some markets with new product coming on line this year don't have sufficient demand to absorb the anticipated space, an NAR analysis shows. Among the markets that could see vacancies rise as a result of new product are sunbelt cities Austin, Las Vegas, and San Jose.

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OAR raises nearly $704,000 last year for RPAC

Thanks to the hard work of Ohio's Local Boards/Associations the Ohio Association of REALTORS raised nearly $704,000 for its REALTORS Political Action Committee in 2007--making it one of the organization’s most successful campaigns in RPAC’s storied history. OAR would like to extend its special thanks to the thousands of REALTORS across Ohio who made an investment in protecting private property rights and livelihood of every real estate professional. Additionally, click to access a special recognition of REALTORS who achieved status in the OAR Capitol Club ($100), OAR Ohio Club ($200), OAR Diamond Club ($500), NAR Sterling R ($1,000), NAR Crystal R ($2,500), and NAR Golden R ($5,000) last year. Thanks again to everyone who contributed to RPAC in 2007 and helped ensure that the voice of Ohio’s real estate community remains vibrant!

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Health care reform

NAR joined U.S. Sens. Richard Durbin, D-Ill., Blanche Lincoln, D-Ark., Olympia Snowe, R-Maine, and Norm Coleman, R-Minn., as they introduced the Small Business Health Options Program (SHOP). NAR endorses the program but reiterates the importance of reforming the health care market for small businesses and independent contractors.

A 2008 NAR health insurance coverage survey found that 91 percent of REALTORS believe the health care system should be reformed and 82 percent believe the health care system isn't meeting the needs of most Americans. Nearly a quarter of NAR’s 1.3 million members don't have health care insurance, mainly because of cost. SHOP would offer tax incentives to encourage states to reform small group insurance markets and to make health insurance premiums for small businesses and the self-employed more affordable. It would also develop a nationwide insurance small business purchasing pool that would still be subject to state insurance regulation to protect those who choose to participate.

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OAR/NAR benefits

Your membership in the Ohio Association of REALTORS allows you to take advantage of a number of member benefits. For questions about member offers and benefits contact Greg Stitz at stitz@ohiorealtors.org.

In addition, the National Association of REALTORS also provides its members many more benefits and offers.

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Tech Tips

Education

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Appraising the Tough Ones (Complex Transactions) and Appraising for FHA...These courses will be held, in Columbus, on May 20 and May 21 concurrently. Register for one or both courses today...

'08 Management and Industry Updates...This year's Updates will be held in June at a location near you. A must-attend. The three-hour course will highlight legal and legislative issues as well as Ohio's residential market. Find a location near you...

30 hours online...Take your real estate continuing education hours online. You can take 3, 6 or all 30 hours in any combination. Sign-up today...

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