"Homeowners and communities reeling from historically high rates of foreclosure need assistance," said Susan Urahn, managing director of the Pew Center on the States. "States are taking steps in the right direction - but they can't go it alone. They need the federal government to do more to build on state efforts to help homeowners keep their homes and prevent more troubling loans from being made."
States had taken the following actions between January and October 2008, according to the latest Pew research:
Limiting Predatory Lending
* Eight states passed legislation tightening high-cost loan regulations since April, bringing the total number of states with predatory lending regulations to 32.
o Washington was the only state that had no previous restrictions against predatory lending to pass legislation; the other seven states - Connecticut, Kentucky, Maine, Maryland, Minnesota, New York and Pennsylvania - strengthened existing laws.
* Six states - Connecticut, Illinois, Kentucky, Maryland, New York and Washington - passed legislation requiring the lender to take into account the borrower's best interest when recommending a mortgage, such as verifying a borrower's ability to repay a loan. Today, 15 states have such laws.
Helping Homeowners
* Sixteen states implemented homeowner counseling campaigns designed to keep families in their homes. Today, 40 states have counseling programs.
Curbing Foreclosures
* Twenty-one states adopted foreclosure intervention laws: three states - California, Michigan and New Jersey - introduced loan modification programs; six states - California, Connecticut, Illinois, Maryland, Michigan and Washington - created refinance programs; and 17 states enacted legislation against mortgage fraud or rescue scams. In all, 34 states now have foreclosure intervention laws.
* Nine states - California, Colorado, Connecticut, Maryland, Massachusetts, New York, North Carolina, Pennsylvania and Virginia - have either instituted a moratorium on foreclosures or increased the number of days before a notice of default must be issued to a borrower, allowing homeowners more time to avoid foreclosure.
* Three states - Delaware, Florida and Texas - created foreclosure task forces to address specific challenges within their state borders. Now 17 states have such task forces.
"Several states, including, Illinois, Maryland and Ohio, have been aggressive in their efforts to help homeowners plagued by foreclosures," said Kil Huh, a project director with the Pew Center on the States who led the research. "As the economic challenges from the housing crisis continue to play out in communities across the country, our research shows that states are looking to each other for a way out of this debacle."
