The foreclosure prevention plans that President Obama announced in his recent State of the Union address may help struggling Northeast Ohio homeowners, says Lou Tisler of the nonprofit Neighborhood Housing Services (NHS), but our hard-hit region is not out of the woods yet.

"When lenders and government-sponsored entities such as Fannie Mae and Freddie Mac look at what keeps people out of foreclosure, they see it's principal reduction," says Tisler. "The new program that the Obama administration has proposed offers triple the incentives to lenders to keep people in their homes through principal reduction."

Although Tisler says that it's "obscene" that the government must provide lenders with additional help, he adds that it's crucial that lenders come to the table and negotiate. "Banks continue to say that they can't reduce principal because that would mean that every homeowner would want a reduction. Yet we're not seeing people strategically defaulting and trashing their credit ratings. People are coming through our door nonstop, and until they're gainfully employed, it won't stop."

Unfortunately, Tisler does see an end to the steady stream of people calling his office seeking help. Yet he believes that principal reductions, more effective foreclosure relief and an economic uptick that reduces unemployment will eventually reduce foreclosures. Until then, he says, Northeast Ohio can continue to expect the foreclosure problem to be an unwelcome guest on its doorstep.

Source: Lou Tisler
Writer: Lee Chilcote