State Rep. Scott E. Reske, D-Pendleton, announced his plan Wednesday to help stem the tide of foreclosures that has forced thousands of Hoosier families from their homes and decreased property values.

The announcement comes as state officials announced that 360 mortgage lenders in Indiana failed to comply with a 2007 state law designed to increase safeguards and help prevent foreclosures. The law, supported by Reske, requires each licensed mortgage office in Indiana to employ a principal manager who has completed the Principal Manager Assessment.

“Madison County families are losing their homes because they cannot make mortgage payments and pay for increasing gas, utilities, and food costs,” Reske said. “Indiana currently ranks 11th in foreclosure fillings. As state officials, we must take action.”

For the past decade, Indiana has ranked above the national average in mortgage foreclosures. A recent study by the Center for Responsible Lending projected that more than 48,000 homes in Indiana will be foreclosed this year alone, and that Indiana homes have seen their property values drop by nearly $1 billion due to foreclosures. The average Indiana home has lost $1,760 in property value.

According to Reske, any solution would require a strong partnership between mortgage lenders, homeowners and state government along with the full cooperation of all facets of the industry. His plan is comprised of three legislative proposals. The proposals include:

n Banning pre-payment penalties on all subprime loans. Pre-payment penalties (a steep fee for paying off or refinancing a loan early) are included in about 70 percent of all subprime loans. Ten states ban most pre-payment penalties, including Maine, Maryland, Minnesota and North Carolina.

“Ending pre-payment penalties on subprime loans will help struggling homeowners who need to refinance,” Reske said.

n Requiring lenders to include taxes and insurance in subprime mortgage payments and review whether borrowers can repay their loans. Reske said this would help prevent people from getting into loans they cannot afford.

n Reviewing and consolidating current state programs designed to prevent mortgage foreclosure and the Housing Rescue and Foreclosure Prevention Act recently passed by Congress.

Reske said a review of the Housing Rescue and Foreclosure Prevention Act would expose any overlapping of efforts to prevent foreclosures, show effectiveness of the act, and determine if the state needs to fill in any gaps that are not yet covered by the act or current state programs.