Few topics are as distressing to state officials right now as the looming onslaught of home foreclosures in Ohio. Our rate of home foreclosure is the highest in the nation, and experts expect the problem to grow as the variable interest rates on many sub-prime mortgages increase upon their reset dates.
Too many people are on the verge of being priced out of their homes and too many more are only one job-loss, one divorce, or one unexpected illness away. Gov. Ted Strickland recently established the Foreclosure Prevention Task Force to address this topic in Ohio. As a member of that task force, I can tell you that we are working hard to find solutions to help as many people as possible to save their homes.
Many families cannot afford to wait for long for help, so we want them to know that several options will be available soon to help homeowners refinance their mortgages to make them more affordable. Freddie Mac is committing $20 billion nationally to fund new mortgage products that will allow many distressed borrowers to stay in their homes, and Fannie Mae is putting together a comparable program that they say will help as many as 1.5 million homeowners refinance their loans. Credit rating requirements have been changed so that more homeowners will be eligible to refinance into new 30-year fixed rate mortgages or adjustable-rate mortgages with a longer fixed-rate period. Freddie Mac and Fannie Mae do not sell mortgages, but they invest in lenders who do, including more than 200 mortgage providers that do business in Ohio.
Another choice is the Opportunity Loan Refinance Program recently created by the Ohio Housing Finance Authority. These loans allow qualifying homeowners to refinance into a 30-year, fixed-rate mortgage. This is a good move away from the risk of adjustable rate mortgages or from interest-only loans that soon become unaffordable. The opportunity program also offers a second mortgage option with a 20-year fixed-rate that can be used for closing costs or to pay off the first mortgage. To be eligible for this program, the household's income may not exceed 125 percent of the median gross income of the county where the home is located, and the homeowner must live in the house and agree to take four hours of approved borrower-counseling.
Thus there are some options and resources available to Ohioans who are having trouble paying their mortgages. The primary advice is always to call your lender and ask for their loss mitigation department. Often they will work with you to restructure your loan, keep you in the home, and continue to receive your stream of payments. If that does not work, then you must be willing to explore some of the other options just listed.
But simply pretending that the problem does not exist is the quickest route to losing your home to foreclosure. Think about your situation, and call your lender to ask for help. You may also call (888) 995-HOPE (4673) for counselors who will help you to assess your situation and your options. We also welcome homeowners to check our Web site (www.ohiotreasurer.gov) or to call us at (800) 228-1102 for more information.