Gov. Ted Strickland, D-Ohio, has signed the ‘Compact to Help Ohioans Preserve Homeownership’ with nine loan servicers: Carrington Mortgage Services, Citi, GMAC RESCAP/Homecomings Financial, HSBC Finance Corp., Ocwen Financial Corp., Option One Mortgage, Saxon Mortgage Services, Select Portfolio Servicing and Litton Loan Servicing. Executives from three other companies mailed signed copies.
According to the governor's office, this document – the first of its kind in the nation – outlines six principles to which the servicers have agreed. The agreement follows months of negotiations.
The firms pledge to engage in a substantial and large-scale loan modification effort for adjustable-rate mortgage resets and subprime mortgages; identify, evaluate and make good faith attempts to contact at-risk or defaulting borrowers as soon as possible; modify loans to the extent permissible within existing fiduciary, contractual or other legal obligations and in accordance with prudent mortgage lending and servicing practices; create incentives for staff and foreclosure counsel to modify loans rather than foreclose; report progress to the Ohio Department of Commerce; and enter into a non-binding agreement with the state for some defined period of time.