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Other states to copy N.C. foreclosure program

Posted December 4, 2008

— The National Governors Association has recommended national legislation based on North Carolina’s new Home Foreclosure Prevention Program, which took effect last month.

Gov. Mike Easley on Thursday briefed members of the National Attorneys General Association about the program. He had discussed it with other governors and President-elect Barack Obama on Tuesday.

Under the new law, lenders must provide homeowners and the state banking commissioner 45 days' notice before a foreclosure action is filed. The law also allows the banking commissioner to extend any foreclosure-filing notice period by 30 days.

The state uses that window to negotiate with the homeowner and mortgage holder on modifying a loan interest rate and payments.

About 1,000 homeowners statewide have already contacted the banking commissioner for assistance, and 52 mortgage servicing firms have given the state more than 7,000 notices of pending foreclosures on sub-prime loans.

According to RealtyTrac, which tracks foreclosures nationwide, monthly foreclosure filings in North Carolina dropped 27 percent in November compared with a year ago, while filings across the country rose 5 percent.

“Attorneys general play a critical role in preventing foreclosures and keeping families in their homes,” Easley said in a statement. “Since most mortgage investment packages today have been sold as securities and are owned by several parties, any one of these parties can file legal actions to prevent the loan modifications that help families avoid foreclosure. The attorneys general can ensure the public has the legal representation it needs.”

Most borrowers must negotiate individually with their lenders, but the North Carolina program uses a standardized modification proposal for every sub-prime borrower who comes through the program. State officials have proposed a monthly mortgage payment equal to 34 percent of the borrower’s gross income, which could be achieved through a mix of interest rate reductions, longer loan amortization or principal reduction.


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  • protestthis Dec 5, 2008

    Citizen782 - don't bother.. whatelseisnew is against or complains about everything.

  • dougdeep Dec 4, 2008

    34% of gross income! I bet that doesn't include escrow for insurance and taxes. If my mortgage payment was 34% of gross income, I'd be living in a much, much larger home.

    Some are just buying too much house and not saving a dime.

  • WRALblows Dec 4, 2008

    Another brilliant insight "whatelseisnew". Apparently you know very little about adjustable rate mortgages, the COFI, the LIBOR, salary depreciation, job loss, equity loss, valuation deflation or any of the other variables destroying the economy. Your solution: pay the ransom. Do you work for a bank? Or maybe you have money tied up in sub prime securities?

  • aanda8104 Dec 4, 2008

    What keeps people in their homes whatelseisnew is a job. If you can't afford to pay the mortgage, because you had to take a pay cut because your company left that's not your fault and you shouldn't penalized. Granted people shouldn't take out mortgages they can't afford in the first place would help, but because someone is down for the moment should mean their out.
    Think back to the 20's and 30's when people lived wherever they could because they lost everything. How would you feel if all of a sudden your world came crashing down and on top of that you lost the only place you knew to call home. It's scary and the fact the it mostly is hurting the already struggling, veterans, and disabled doesn't sit well with me to begin with. So before you run your mouth think about what you would do if you were handed a pink slip and told sorry we can't help you made to much money last month how you would be effected.

  • whatelseisnew Dec 4, 2008

    What keeps people in their homes is; they pay their mortgage.