Default on Loans Soars

Springfield News-Sun - June 24, 2005

Springfield News-Sun

by Claire Bushey

An Ohio think tank released a report Thursday showing Clark County has the state’s fourth highest foreclosure rate, quantifying the continuation of a problem that has bedeviled city officials and nonprofits for almost a decade.

Policy Matters Ohio, a Cleveland-based research institute, released data that showed 894 foreclosures were filed in Clark County in 2004, or one foreclosure for every 159 people.

“We’ve been high for several years,” said Kerri Brammer, lending manager for Neighborhood Housing Partnership. “It’s our concern that it’s going to continue to get worse before it gets better.”

The report listed Montgomery, Cuyahoga and Highland counties as having the state’s three highest foreclosure rates. In Montgomery, which contains Dayton, one foreclosure was filed for every 137 people.

The foreclosure problem is spread across the state, said Zach Schiller, research director for Policy Matters Ohio. Ohio’s foreclosure filings have tripled since 1994.

Clark County recorded 135 foreclosures in 1996.

The report blamed high foreclosure rates on the weak economy and predatory lending. Ohioans have suffered underemployment and job losses. At the same time, subprime lenders have extended loans to people who can’t afford them, Schiller said.

Appraisal fraud and consumers’ lack of money management skills also contribute to the high rate, Brammer said.

“It’s a combination of stuff, and that’s why we’re so much pushing (financial) education,” she said.

Nancy Flinchbaugh, Springfield’s fair housing and mediation coordinator, participated in Partnership for Success, a program established to provide the Springfield Funders Forum with recommendations for combatting various problems, including foreclosures. The forum includes city and county governments, the Turner Foundation, the Springfield Foundation and United Way.

The program’s recommendations include early intervention when a homeowner falls behind on the mortgage, increased counseling for those considering buying a home, and more financial education in school. The program’s findings will be presented June 29.

Schiller said Policy Matters Ohio supports licensing real estate appraisers and including mortgage lending in the Consumer Sales Protection Act.

“This would prohibit unfair, deceptive and unconscionable acts between mortgage lenders and their customers and give consumers the right to bring private suits for lending fraud,” stated a similar report the institute released in 2004.

Predatory lending exists, but consumers also live beyond their means, Flinchbaugh said.

Meanwhile, there’s a reluctance to stop the problem because extending credit to people who can’t manage it fuels the economy.

“I don’t think there’s any simple solution,” she said.

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