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RALEIGH — The state’s commissioner of banks could prod lenders and borrowers to renegotiate the terms of subprime mortgages at risk of default under a bill the General Assembly approved Thursday.

Gov. Mike Easley lent his support to the measure earlier in the session and is likely to sign the measure.

Roughly 60,000 homeowners who entered into subprime loans between Jan. 1, 2005, and Dec. 31, 2007, could get help under the law, which should go into effect Nov. 1.

“We’re putting the pedal to the metal to have everything ready by then,” said Joseph Smith, state commissioner of banks.

The largest part of the preparation, he said, was compiling a database of the particularly problematic loans.

Subprime mortgages are home loans given to those with the riskiest credit. A number of these loans were often consummated without lenders or borrowers going through rigorous research and document review.

Before a mortgage company can file foreclosure against one of those loans, the company would have to give 45 days notice to the state and the homeowner.

That would give the commissioner’s office time to intervene.

“We will try to bring borrower and lender together to facilitate a modification,” Smith said. Such modifications can reduce or hold steady interest rates. The idea, he said, is to keep people in their homes while making sure that banks are repaid the bulk of what they’re owed.

In addition, the commissioner’s office will review the loans to ensure that their terms were legal.

In a news conference two weeks ago, Rep. Dan Blue of Wake County, one of the bill’s primary sponsors, said the measure would protect both families and whole neighborhoods, because when one home is foreclosed it can lead to drops in the value of nearby homes.

This law, he said, will head off unnecessary knocks in home values and well as keep people from losing their homes.

“Once something gets in full foreclosure mode, we can be pretty much assured that all of the possibilities of trying to keep this home from being sold from under these families will have been exhausted,” Blue said.

The proposal passed the House unanimously, and only one member of the Senate voted against it.

“Looking at the whole subprime debacle, if it’s the responsibility of the taxpayers of North Carolina to bail people out for bad financial decisions, then are we going to bail out people who made bad investments in some company’s stock?” said Sen. Andrew Brock, a Davie County Republican who opposed the bill. “People must do the due diligence, read the fine print and know what they’re getting themselves into.”

But others see an urgent need for the state to intervene. There were 1,122 foreclosures in Guilford County during the first three months of the year.

Smith said the state is already working with private partners to help people renegotiate their loans. And, he said, that when people run into trouble paying their mortgages, they should ask for help from the company servicing their loan.

North Carolina is caught up in the same mortgage lending crisis that has caused trouble on Wall Street, leading to problems for the major loan backing companies Fannie Mae and Freddie Mac, and sparked waves of foreclosures across the country.

“We’re going to have a lot of foreclosures, but we have less of a problem here than people have in California, Arizona, New Jersey ...,” Smith said. In particular, he said, other states have seen home prices drop precipitously as a result of the credit crunch. Prices have sagged somewhat here, he said, but not as much. “That is a blessing. We have a pretty good environment to work this out in.”

Contact Mark Binker at (919) 832-5549 or mark.binker@news-record.com