COLUMBUS The Ohio House voted strictly along party lines Wednesday to enact a six-month time-out for homeowners when it comes to the state s accelerating pace of foreclosures.
But that clock has a long way to go before it begins to tick, assuming it ever does. The law would not take effect until Gov. Ted Strickland signs it, and first it has to get past the Republican-controlled Senate after all GOP members in the House opposed it.
We ve had 13 straight years of increases in foreclosures, the most we ve had in state history, said Rep. Mike Foley (D., Cleveland), one of the bill s primary sponsors.
There were 85,000 foreclosure filings last year. It looks like the numbers are going to be even greater in 2009 than in 2008.
The measure would halt most residential mortgage foreclosure proceedings for six months and impose a $750 fee on new foreclosure filings by lenders in court to underwrite a statewide database and fuel county and state programs to prevent or mediate such disputes.
Property owners would have to make at least half of their normal monthly mortgage payments during the moratorium with taxes and insurance at the head of the line to receive their shares.
The failure of owners to live up to their ends of the bargain would open the door for banks and other lenders to ask the courts to restart foreclosure proceedings.
House Republicans argued the moratorium unconstitutionally infringes on the terms of existing mortgage contracts and overreaches at a time when many counties are making progress through mediation that leads to agreements with homeowners and their lenders.
They argued the court-filing fee as well as a new $1,000 annual fee for mortgage servicers to register with the state and undergo criminal background checks would ultimately be passed onto home buyers who pay their loans on time.
Over 92 percent of Americans are current in their mortgages, said Rep. Bill Coley (R., Middletown).
Over 98 percent of Americans are not in foreclosure. I m asking you to remember the vast majority of people in this state who are not in foreclosure and are not delinquent in their loans.
The moratorium would not apply to foreclosures initiated on vacant homes. Also, it would not halt the court finalization of property sales for which foreclosure auctions had already been completed.
A controversial provision that would have allowed judges to modify the terms of existing mortgage contracts was removed from the bill before it reached the House floor.
It remains to be seen whether the Senate will address the bill before it recesses by June 30 for the summer.
Opponents of the bill argue that a fall vote with the mandatory 90-day waiting period for the law to take effect means a moratorium might not be in place until 2010 if ever.
Contact Jim Provance at: email@example.com, or 614-221-0496.