Monday, August 2, 2010

Kearney bill could generate funding for foreclosure prevention

Ohio State Senator Eric Kearney (D-9th) has introduced a new bill aimed at reducing Ohio's foreclosure problem.

Senate Bill 286 (S.B. 286) would require real estate brokers to establish a separate interest-bearing trust – or other special account – for the deposit of earnest money connected to real estate purchases.

This money, currently not collected or utilized, would accrue interest that could be used to fund statewide foreclosure efforts.

Kearney said that despite the time it takes for many real estate sales to take place, no interest is earned on these transactions. The funding source would come at no cost to the state, he said.

"Foreclosures are ripping families and communities apart," Kearney said. "We need creative solutions to address this issue and I believe we have a potential funding source in these real estate transitions. The revenue generated is germane to the problem and is not being utilized by the citizens of Ohio in any other way. By doing this we can create a funding stream at no loss to anyone."

The idea for S.B. 286 came from Kearney's own experience in real estate, as well as collaboration with real estate professionals in his district.

"Foreclosures in Cincinnati have risen to 2.57 percent," Kearney said. "While still below the state average, I don't want to see Cincinnati suffer the same fate as Cleveland. This is a major issue and as a state we need to focus our resources on fixing the problem."

According to RealtyTrac, Ohio has experienced 68,194 foreclosure filings through the first six months of 2010. In June, one in 477 housing units (10,639) entered the foreclosure process.

Previous reading on BC:
Cole foreclosure proposal deemed a duplication of services (6/15/10)
Cincinnati accepts $8.1M for foreclosure remediation (5/4/10)
Ohio land bank bill now law (4/8/10)
Ohio land banking bill passes House, moves on to Senate (12/21/09)
Ohio county land banking passes House committee (12/14/09)