Brown in Toledo to promote bill to protect homeowners

Sen. Sherrod Brown (D., Ohio) listens as Luckey Mayor Belinda Brooks relates how her efforts to lower her mortgage payments ended up in foreclosure proceedings. Mr. Brown came to Toledo to promote legislation aimed to prevent such ‘dual track’ abuses.

Thousands of Ohioans have been hurt by the nation’s mortgage crisis and many of those affected were hurt needlessly, U.S. Sen. Sherrod Brown said Friday in Toledo.

Mr. Brown (D., Ohio) was in town to promote legislation he is sponsoring that would prevent lenders from launching foreclosure proceedings against homeowners who are in the midst of trying to modify their monthly mortgage payments, a process known as “dual track.”

The senator, who spoke at the Toledo offices of Advocates for Basic Legal Equality Inc., also said he fears the 10 mortgage servicers involved in a settlement, announced this month, to pay $8.5 billion to homeowners hurt by foreclosure abuses in 2009 and 2010 may try to use tax deductions to write off their settlement payouts.

Mr. Brown said he’ll fight any attempt to use the tax deductions because that amounts to sticking American taxpayers with the bill caused by the mortgage services through their greed, negligence, or indifference.

“Taxpayers again would have to subsidize their malfeasance,” Mr. Brown said.

Mr. Brown said he wrote to Ben Bernanke, Federal Reserve chairman, and Tom Curry, comptroller of the currency, urging them to prevent the use of tax deductions to offset settlement payouts.

The senator said more than 95,000 Ohio homeowners are eligible for settlement payments, including 5,000 in Lucas County. They will get an average of $2,125.

Meanwhile, Mr. Brown said he’ll seek co-sponsors for legislation he introduced last year to prevent “dual track” abuses.

During his Toledo visit, Mr. Brown introduced Belinda Brooks, a small business owner, single mother of three, and the mayor of Luckey, Ohio, who tried to modify her mortgage in 2009 and to her shock, ended up in foreclosure.

Ms. Brooks, a health-care benefits consultant, was divorced in 2007 and saw her mortgage interest rate rise from 6 percent to 7.5 percent. In 2009, Ms. Brooks, who was current on her mortgage payments, asked the servicer, Aurora Loan Services, to give her the 6 percent rate through the federal Home Affordable Modification Program.

Because she was current on her mortgage payments, she was told she couldn’t have a modification, but if she were to skip a mortgage payment she would qualify.

So she skipped one payment at the company’s suggestion, she said. But after Aurora gave her a trial loan modification, reducing her payment by $400, it simultaneously began foreclosure proceedings for her one-month deliquency.

“I was just trying to get my interest rate back to 6 percent,” she said.

Ms. Brooks said she eventually sued and the foreclosure was dismissed when Aurora was sold last year but she believes the foreclosure will be refiled by Aurora’s new owner, Nationstar Mortgage, once it gets to her paperwork.

“It makes you very angry,” Ms. Brooks said. “A lot of people look at you like you’re just an irresponsible debtor.”

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.