As previously discussed Ohio Governor Ted Strickland proposed the establishment of a compact between subprime mortgage servicers and the state aimed at tackling the increasing number of foreclosures in Ohio. The following report in the Dayton Daily News discusses an agreement signed between the state and nine servicers.

Strickland, mortgage companies sign foreclosure compact

Nine mortgage loan servicers have signed non-binding compacts with the state in what Gov. Ted Strickland called a first-in-the-nation effort to keep homeowners out of foreclosure.

"I think today is an historic day in the state of Ohio," Strickland said Monday, April 7, at a Statehouse news conference. Bill Cosgrove, president of the Ohio Mortgage Bankers Association, and representatives of six of the loan servicers joined Strickland.

About 55 percent of Ohio home loans are with the nine companies, Kimberly Zurz, state Commerce Director said.

The compacts are based on six principles:

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

The companies signing the compacts are:

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

Cosgrove declined to comment when asked if the companies would have signed had the agreements been binding, with sanctions for violations.

Strickland said the companies have put their "honor and prestige on the line."

"No one said the Declaration of Independence was legally binding but a lot of people paid attention to it," Strickland said, quoting his legal counsel Kent Markus.

The loan servicers and their trade association had balked at Strickland's earlier, more detailed proposal for a compact, announced Oct. 9, 2007.

The new compacts are part of the state's "Save the Dream" program that is aimed at helping Ohioans facing foreclosure. For information, call 1-888-404-4674.

To view the online article, please click here.

To view the Press Release from the Governor's office, please click here.

About Safeguard
Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 450 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.