Can the City work to force lenders into workouts, perhaps using a third party ombudsman to negotiate with the lenders?
Federal and state law preempts the City from enacting laws to regulate lenders and lending practices. However, the Governor’s Foreclosure Prevention Task Force recently released a draft report entitled “Ohio Foreclosure Prevention Task Force Combined List of Recommendations.” The Task Force endorses the concept of working with lenders and servicers to maximize alternatives to foreclosure rather then requiring such action. The report says that the State should “…urge loan servicers to…achieve maximum flexibility in modifying loans…” and “urge loan servicers to pursue all workout options…” While the State backs the notion of meaningful workouts and loan modifications, both the State and the City are without means to enforce this idea. Modifications themselves can have unintended consequences when the lender actually reduces the principal amount of the loan owed as a part of the restructuring of the loan. Although this reduces the total amount owed by the property owner, the forgiven pa
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- Can the City work to force lenders into workouts, perhaps using a third party ombudsman to negotiate with the lenders?
