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Foreclosure reform may still be a year away

The housing market crises and news of the foreclosure scandal have caused a great deal of press. The mortgage lending industry has been under fire in Ohio and across the nation for questionable foreclosure practices for some time now. Federal regulators stepped in and said due to pervasive misconduct in the foreclosure processes employed by major banks, the nation's 14 biggest banks need to not only overhaul the foreclosure process, but compensate some homeowners who were financially injured by wrongdoing or negligence in foreclosure activities.

But overhauling the process is going to take some time; some say as much as a year or more. John Walsh, the acting Comptroller of the Currency addressed the Institute for International Finance last week, discussing the sweeping reforms regulators demanded of the country's top mortgage servicers. He says "I wish it could be completed more quickly, but it's important that it be done correctly and in a way that assures fair treatment for homeowners who underwent foreclosure proceedings."

Part of the difficulty that will cause delays in revamping the process involves the number of regulators and differing settlement agreements related to the foreclosure debacle. Walsh says the banks' obligations under all of the working parts must be harmonized into one new revamped system to restore confidence in the process.

The major lenders agreed in April to design a process to help homeowners with their claims that may have arisen in the foreclosure scandal. Homeowners who believe they were the victims of wrongdoing, and whose homes were foreclosed on in 2009 and 2010 have the right to request a review of their case under the April settlement agreement.

Unfortunately, foreclosures continue in Cincinnati and across the state. Financially strapped homeowners who are currently facing potential foreclosure may still have options to save their home. In many cases, filing for bankruptcy is an option. Financially distressed homeowners can seek an assessment from an experienced Ohio bankruptcy attorney to learn more about the debt relief offered under federal law.

Source: Los Angeles Times, "Foreclosure reforms could take a year or more," Alejandro Lazo, Sept. 23, 2011

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