According to the US Treasury, just over 14,000 Ohioans are making modified home loan payments under the federal Home Affordable Modification Program, also known as HAMP. That means that these borrowers have gotten the company to whom they pay their mortgage payment to put them in a more affordable mortgage along guidelines written by the federal government.
So, 14,000 Ohioans helped under HAMP. Sounds good, right? But compare that number to the more than 120,000 Ohio homeowners who are at least three months late on their mortgage payments. Looking at it that way, only about 11 and a half percent of Ohioans that really need help, are getting it.
The picture gets even less rosy when you compare that ratio to other states which is exactly what Paul Bellamy, head of Cuyahoga County's Foreclosure Prevention Program, did.
Paul Bellamy: The statistics you were mentioning earlier are to be contrasted with some other states where instead of about 11 percent of mortgages modified under HAMP, almost 30 percent of mortgages have been modified. So Ohio is lagging again.
Lagging so much, that under Bellamy's analysis, Ohio ranks 49th in a list of all 50 states and the District of Columbia. Only borrowers in Indiana and Oklahoma have received less help from HAMP. Wednesday, on WCPN's call-in program, The Sound of Ideas, housing counselor Mark Seifert from the nonprofit group Empowering and Strengthening Ohio's People, told Dan Moulthrop part of the problem is that the program has been exceptionally confusing since day one.
Mark Seifert: I think if they ever figure out the rules - both the government and the lenders - it could make a huge impact.
Dan Moulthrop: What do you mean by that 'If they ever figure out the rules?' Haven't they made public the rules?
Mark Seifert: Yeah and they make it public every three weeks and they keep changing them which makes it really frustrating for the lenders and really frustrating for us.
Among the rules that change, Seifert said, are what types of documentation are needed. Another guest on the show, Bobby Ruckstuhl who heads a paralegal firm that works for foreclosure attorneys says simply communicating with loan servicers can be a logistical nightmare.
Bobby Ruckstuhl: The communication attempts that we make - whether it's delivering information, the third party authorizations or the submissions packages - are routinely lost on every single client. Minimum submissions of three times to a lender before they acknowledge receipt.
Dan Moulthrop: You have to submit the same paperwork three times to a lender in order for them to actually acknowledge that they've received this paperwork?
Bobby Ruckstuhl: Absolutely.
James Sassano is a Cleveland attorney who represents lenders.
James Sassano: In the summer and into the fall, the (US) Treasury Department was issuing weekly updates on HAMP and there was constant training - taking people away from their jobs and trying to learn what the servicing guidelines of HAMP were. It's settled down a little bit, but nonetheless they are still swamped with many applications.
Sassano also wonders if Ohio's sinking economy and rising unemployment are making it tougher for borrowers to find loan help. Bellamy at the County's Foreclosure Prevention Program also suspects that's part of the problem, but his argument takes a slightly different tack. Loan servicers, Bellamy argues, can find better investment returns by modifying loans on houses in areas where the economy is stronger.
Paul Bellamy: The lower property values and the increasing unemployment...all of these things stack up against and really argue in favor of the loan servicer returning the phone call from California as opposed to the phone call from Cleveland. And it's sad, but that's where we are.
Other rust belt states are also near the bottom of the list of those getting help from the federal program; Michigan ranks 35th and Indiana comes in at number 50.