Iowa Attorney General Requests Extension of Mortgage Counseling Law

Iowa Attorney General Tom Miller wants lawmakers to extend a state law that requires creditors to provide notices of free, confidential mortgage counseling services to homeowners in the state facing foreclosure.

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Under a law that expires July 1, lenders must inform delinquent borrowers about ""Iowa Mortgage Help"":http://www.IowaMortgageHelp.com, a provider of counseling and mediation services for struggling homeowners to help them pursue an alternative to foreclosure.

""Many homeowners facing foreclosure are hanging by a thread,"" Miller said. ""And that thread is Iowa Mortgage Help, which runs a hotline that has fielded more than 20,000 calls from homeowners in desperate need of help.""

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Miller continued, ""Thousands of these Iowans learned about the hotline through state-mandated notices. I urge our legislature to make sure that Iowans who need it most are aware that this invaluable free help is available.""

The required ""Mortgage Mediation Notice"":http://www.iowamortgagehelp.com/pdfs/IMH_Mediation_Notice.pdf is readily available for lender use through the ""Iowa Mortgage Help site"":http://www.IowaMortgageHelp.com. The counseling and mediation services offered are federally funded.

Miller and the Iowa Finance Authority created the program's hotline with a $1.5 million federal grant. Other partners include Iowa Mediation Service, Iowa Legal Aid, local housing counseling non-profits located throughout the state, and their umbrella organization, the Iowa Home Ownership Education Project (IHOEP).

""This important program doesn't cost the state,"" Miller said. ""But it will cost Iowans and their communities dearly if homeowners in financial trouble don't know it's available.""

Miller has requested state lawmakers extend the notice requirement for one year. Both the Iowa Senate and the Iowa House have passed an extension but not in the same piece of legislation.

Since March 2008, more than 15,000 Iowans facing foreclosure filed applications for assistance from Iowa Mortgage Help. Some 5,000 homeowners received a positive outcome and avoided foreclosure, according to a statement from the Iowa attorney general's office.