Full text of the Task Force Report and Recommendations

The Ohio Foreclosure Prevention Task Force was established in March 2007 by Governor Strickland to scrutinize the increasing number of home foreclosures in Ohio. The Task Force, chaired by Ohio Department of Commerce Director Kimberly Zurz, includes representatives from local, state and federal governments, members of the Ohio banking and mortgage banking communities, and non-profit housing advocates. The Task Force recommendations, summarized below, were adopted at the final Task Force meeting on September 10, 2007.

The Ohio Bankers League dissented from the final report, indicating several of the recommendations were overly vague and that "coercing lenders to rewrite existing loans" falls outside the state's authority and could "lead to the drying up of mortgage funding in Ohio."

Summary of Significant Task Force Recommendations

Encourage Borrowers to Get Help Early

• Utilize county database information, such as mortgage recordings and real estate tax delinquency data, to identify and contact at risk borrowers.

• Develop a central portal to link all online state foreclosure information.

• Create and utilize local coalitions to educate and aid borrowers.

Expand Housing Counseling and Intervention Services

• In addition to government funding, seek donations from private sources such as banks, mortgage companies, and subprime loan services to provide $10 million per year for housing and financial counseling.

Work with Lenders and Servicers to Maximize Alternatives to Foreclosure

• Pursue all options specifically available to the State and monitor subprime mortgage servicers to ensure significant levels of meaningful loan modifications.

• Advocate for adoption of a model Pooling and Servicing Agreement to provide a safe harbor for servicers to negotiate reasonable workouts with willing and able homeowners.

• Urge loan servicers to make loan modifications available any time from pre-default to foreclosure sale.

• Urge loan servicers to restructure loans to permit:

  • Changes from adjustable to fixed interest rates;

  • Inclusion of escrow for taxes and insurance;

  • Reduction or forgiveness of principal in excess of current value and/or to a reasonable debt-to-income ratio based on income;

  • Waiver of late charges, attorneys' fees, and pre-payment penalties unless the servicer specifically cites restricting contract language.

• Require servicers to contact borrowers in subprime adjustable rate mortgages at least six months prior to reset to notify them of the reset, to provide them with an estimate of the new payment, and explain loan modification and other borrower options.

• Urge loan servicers to pursue all workout options including: extension of forbearance and catch-up periods, establishing a special servicing team for loan modifications, and contracting with third parties to assist and counsel borrowers.

• The Department of Commerce should define the acceptable standard of performance in mortgage workouts and loan modifications, and provide incentives for compliance by lenders, including expedited processes for foreclosure on vacant property.

• The State Treasurer should perform an audit of State investments and establish investment criteria to find and terminate relationships with subprime lenders or their parent companies whose lending practices are deemed harmful to the State.

Provide Options for Homeowners to Refinance Their Mortgages

• Provide state income tax forgiveness on loan readjustments and advocate for the passage of federal income tax forgiveness on mortgage cancellations.

• Expand the underwriting flexibility of the Ohio Housing Finance Agency (OHFA).

Improve Ohio's Foreclosure Process

• Encourage the judicial branch to give clear authority to Clerks of Court to provide basic information and a list of resources with delivery of every foreclosure complaint.

• Encourage attorneys to represent borrowers pro bono in foreclosure cases.

• Develop a model local case management rule that identifies foreclosures involving owner occupied homes, provides for alternative dispute resolution, and mandates additional supporting documentation attached to every foreclosure complaint.

• Expedite the post-judgment property transfer process, potentially utilizing a two-track system that expedites the foreclosure and transfer of investor properties.

Strengthen Protections for Homeowners

• Review the existing sextennial valuation and triennial update process to determine ways to more accurately reflect current market valuations.

• County auditors should identify and report suspicious real estate transactions to the Attorney General or to local county prosecutors.

• Require subprime mortgage servicers to file a worksheet with the State containing information about the mortgage loan terms at the time of filing a foreclosure complaint to ensure that the mortgage terms were consistent with state law.

• Require all mortgage lenders to offer the option to escrow tax and insurance.

Help Communities Recover from the Aftermath of Foreclosures

• Include a major initiative in the Governor's Urban Agenda to address vacant housing and revitalize neighborhoods, including planning, demonstration, and incentive grants.

• Sheriffs should record and file deeds within fourteen days of confirmation of sale from a sheriff sale to hold owners accountable for taxes, fees and building code compliance.

• Restrict initiation fees and require clear disclosure on lease options to purchase.

Ohio Foreclosure Prevention Task Force Members

State Representatives

Federal & Local Government Representatives

Lender Representatives

Nonprofit-Sector Representatives