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Ohio groups urge underwater mortgage relief

A new report, created in Ohio, is urging President Obama to write down all underwater mortgages as a way to stimulate the economy. Across the country, one out of every five homeowners owes more than their home is actually worth in today's housing market. The foreclosure crisis has struck hard, and experts expect foreclosures to continue to set records. This blog discussed underwater mortgages earlier this month.

The housing and financial crush that began several years ago has hit Ohio hard. According to a report released Monday by the Mahoning Valley Organizing Collaborative in conjunction with the Ohio Organizing Collaboration the New Bottom Lone Coalition, more than 315,000 people in Ohio alone have lost their jobs since the beginning of 2008. Foreclosures in Ohio are expected to also continue, with 282,000 foreclosures in Ohio by the end of 2012, according to the new report called, "Ohio Underwater."

With a large, and potentially increasing, number of homes underwater to the mortgage, the report says that requiring banks to write down all underwater mortgages may provide benefits to the nation's economy. The idea to write down all underwater mortgages could generate $1.64 billion in the Ohio economy each, says the report.

Jobs could be created by the improved economy, as many as 24,000 in Ohio alone. And the report also says Ohio families could save an average of $284 each month on mortgage payments should the banks be forced to write down mortgages, according to the report. That savings could be a boon to a sputtering economy.

The Center for Responsible Lending says Ohioans are expected to lose more than $17 million on homeowner wealth due to the glut of homes on the market from foreclosure, which has driven home prices down.

Source: Youngstown Vindicator, "Report targets underwater mortgages," Karl Henkel, Dec. 20, 2011

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