States Push for Foreclosure Help

From Tami Luhby at CNNMoney: States urge action on foreclosures

Some of the ideas planned by a group of state officials who have worked for more than two years to stem the foreclosure tide are:

- Cut loan principal for borrowers whose homes are worth much less than their mortgages.

- Attack the problem of option adjustable rate mortgages

- Cut the red tape.

"Potential foreclosures are being built up in the system, said Tom Miller, Iowa's attorney general. "The efforts really need to be more efficient more effective more timely on behalf of the servicers."

So far, the current administration's program effort has helped 66,500 people with another 787,200 homeowners in trial modifications.

Other parts of the plan include:

-Reduce loan principal: Reducing principal will make it less likely that homeowners will default on their modified loans.

- Pay attentions to option ARMs: Servicers need to address these loans before they fall into foreclosure.

- Limit required paperwork: The portal is currently set to launch at the end of March.

- Expand counseling and mediation efforts: States should expand their housing counseling and mediation programs.

- Suspend foreclosure proceedings: Currently, only the sale is stopped.

- Help the unemployed: A growing number of borrowers with good credit backgrounds are behind in their payments because of the weak economy,

This all sounds good to me. I say, "Now, we're finally talking." This is exactly the kind of things that need to be happening.