Mortgage Firms Pledge Help

Ohio Governor, Ted Strickland today announced that nine mortgage loan servicers agreed to sign a 'compact to Help Ohioans Preserve Homeownership,' the first agreement of its kind in the nation. The pledge is designed to help struggling Ohioans avoid foreclosure and keep their homes.

Speaking at a news conference, Strickland said, "These steps will reduce foreclosures in Ohio and bring stability to the families and communities affected by the crisis." Strickland also went on to call the agreement "historic."

The agreement calls on lenders to make modifications to existing loan agreements when borrowers are unable to make payments. The lenders also agreed to make 'good faith attempts' to contact defaulting borrowers as soon as possible.

Each company came to a separate agreement with the state based on its own business models and practices. Some made specific promises to contact borrowers a certain time before an adjustable rate mortgage was scheduled to reset to a higher rate, while others did not.

The non binding agreements expire in June 30, 2009, a point at which leaders said they expect Ohio to have seen the worst of the foreclosure crisis.

The nine that signed the agreement are: Carrington Mortgage Services; CitiGroup; GMAC RESCAP/Homecoming Financial; HSBC; Ocwen Financial Corp; Option One Mortgage; Saxon Mortgage Services; Select Portfolio Servicing; and Litton Loan Servicing.