WASHINGTON, D.C. – March 3, 2010 – (RealEstateRama) — Representative Marcia L. Fudge (D-OH11) collaborated with fellow Ohioans, Representatives Betty Sutton (D-OH13) and Mary Jo Kilroy (D-OH15), and Representatives Maxine Waters (D-CA35) and Kendrick Meek (D-FL17) to introduce H.R. 4635–a measure to combat foreclosures.
The bill requires lenders of Federal loans or guarantees to enter into mediation with homeowners prior to placing the property in foreclosure or a sheriff’s sale.
A Center for American Progress study found that often the first time a borrower and lender discuss foreclosure is in court. In fact, it is estimated that over 80% of homeowners facing foreclosure did not attempt to prevent the loss of their home as of the end of 2008.
“I was shocked to learn that many homeowners don’t sit down with their lenders until they end up in court trying to save their homes from foreclosure. For many, it is already too late to renegotiate their mortgage and foreclosure is inevitable,” said Rep. Fudge. “What’s the answer? Require lenders of Federal loans to discuss options with homeowners before placing the home in foreclosure. We can help families save their homes with this common sense solution to an, unfortunately, commonplace problem.”
Ohio has been particularly impacted by the foreclosure crisis and projections indicate no signs of change. In Rep. Fudge’s Congressional District alone, the Eleventh District of Ohio, 18,531 homes are projected to be foreclosed upon over the next four years.
“2009 brought a record-breaking number of foreclosures for working Ohioans,” said Rep. Sutton. “With more than 15 percent of mortgages in the state delinquent or in foreclosure, we reached an absolute tipping point. That is why I am proud to join my colleagues in introducing legislation that will mandate mediation prior to foreclosure proceedings. This legislation will ensure that every homeowner has a real chance to save their home.”
Rep. Kilroy said “We must give those in central Ohio and across the nation a chance to stay in their homes, rather than face eviction. Mediation is a proven tool in our battle against the foreclosure problem that so many in our communities face. One way we can win the fight to stop the spread of foreclosure is with passage of a mandatory mediation law.”
Ohio and a few other states have implemented mediation programs. Unfortunately, many of those programs, such as Ohio’s, are not mandatory. However, we know mediation is effective. In fact, nearly 75% of mediated mortgage disputes are resolved without foreclosure.
“As Chairwoman of the Subcommittee on Housing and Community Opportunity I am a strong proponent of mandatory mediation for homeowners who are facing foreclosure, and I am pleased to introduce this bill with Congresswoman Fudge,” said Rep. Waters. “American homeowners who find themselves in this unfortunate position deserve to have an in person, up front conversation with their mortgage servicer to get the facts and know what their options are. While my colleagues and I are working diligently to mitigate and prevent foreclosures across the country, it is important to get this provision into law now so that the rights of homeowners facing foreclosure are respected and protected.”
“Families struggling to stay in their homes shouldn’t fall prey to unscrupulous lenders unfairly shutting the door on them,” said Rep. Meek. “Mediation is a win-win: mortgagors get a chance to recoup their losses and families get the opportunity to stay in their homes. I will continue fighting for mediation on behalf of Florida families to stem the foreclosure epidemic once and for all.”
