Mediation First Before Home Foreclosures
Ohio House lawmaker Matthew Dolan has proposed a bill that would bring relief to homeowners who are at risk of home foreclosures. With the bill on foreclosure moratorium pending on the Ohio Senate, Dolan is hoping that his bill would provide an alternative approach to foreclosure moratorium and would gain bipartisan support.
Dolan’s proposed bill would require lenders and borrowers to mediate before foreclosure action could be filed. According to industry experts, the bill which demands parties involved to meet at bargaining tables, is a different approach in helping abate the spread of foreclosure. Last May 20, the House Democrats filed a bill that would stop foreclosure filings in Ohio for six months.
Dolan hopes that his bill would gain support among Senate Republicans. The bill is expected to be introduced before the Senate by Senator Shannon Jones. Court mediation programs in Ohio are currently voluntary. And the burden of seeking for a mediation rests on homeowners. Troubled borrowers have the responsibility to request for court-ordered mediation.
Dolan said that many borrowers are scared to deal with the court system, thus the low number of mediation cases in the state.
Meanwhile, there is lack of interest among Senate Republicans on the proposed moratorium bill by Democrats. Finance Committee head Senator John Carey said that calling a moratorium on home foreclosures is not the correct approach to solving the problem.
He said that the moratorium is just making matters worse by putting more distressed homeowners in deeper holes. Industry analysts said that the foreclosure moratorium is just delaying what is inevitable. They said that the approach is just a stop gap and not a permanent solution to the foreclosure problem. They cited the increase in the number of foreclosure properties following the lifting of moratorium programs in some states.
Meanwhile, Representative Michael Foley, author of the moratorium bill said that his proposal would force banks and mortgage servicers to pay fees for foreclosure filings. The fees would be directed to community housing organizations which he claimed are effective in their foreclosure prevention efforts.
On his part, Dolan said that his measure would force someone in authority to sit and negotiate with troubled homeowners to find ways to help them avoid home foreclosures.
