State Mortgage Aid Not Reaching Many Borrowers

Friday, September 7, 2007
Topics: Economy, Other
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Ohio has money to spend for borrowers in trouble, but the state is having trouble finding borrowers to take the loans. A new study by the Mortgage Bankers Association shows that while Ohio still leads the nation in the number of people seriously late on their home mortgage payments or in foreclosure, the numbers may be leveling off. But others say many troubled Ohio's borrowers are too far gone for help. ideastream's Mhari Saito reports.

For the first time in at least a year, the MBA says the percentage of Ohio home loans starting to go into foreclosure fell from 1.07% to .98%.  In a statement MBA Chief Economist Doug Duncan says numbers like this are signs that Ohio’s foreclosure problems may be “levelling off, albeit at a higher level” than the rest of the country.

Another sign may be found in the trouble the state is having signing up borrowers to refinance out of risky mortgages into fixed rate loans.  In April, Ohio’s Housing Finance Agency announced it would work with partner lenders around the state to offer the Opportunity Loan, financed by the proceeds of up to $100 M million in taxable municipal bonds. But OHFA Debt Management Director Bob Connell says they’ve only got $14 million worth of loans in the pipeline. Part of the problem, he says, is getting the word out to potential borrowers. But also, he says, they’ve found that most of the Ohioans looking for aid were already in foreclosure.

Bob Connell: Unfortunately a number of the people who approached our lenders were already past the point that we could help.

Connell says they don’t yet have enough loans made to justify the cost of issuing bonds and are aggressively looking for ways to sign up more borrowers.  I’m Mhari Saito, 90.3.

More In This Series...

This feature is part of the series Mortgage Meltdown.