HAMILTON - The number of foreclosure filings in Butler County has more than tripled in the last decade as Ohio has become the nation's leader in home loan defaults. According to Butler County Clerk of Courts records, one of every 187 county residents experienced foreclosure last year.
 

Concentrated in the county's urban areas, the foreclosure growth has contributed to the spread of blight in many neighborhoods and the destruction of the American dream of home ownership.
 

Between 1994 and 2004, foreclosure suits filed in Butler County grew 266 percent from 487 to 1,782. A JournalNews study of last year's filings showed that Hamilton and Middletown led the county with 492 and 422 filings, respectively.
 

Trenton led the county in per capita foreclosures with filings for one in every 112 residents. Middletown and Hamilton followed with per capita rates of 117.5 and 124.
 

Foreclosure increases in Butler County have closely followed the state trend. Between 1994 and 2004, foreclosure filings in Ohio increased 246 percent from 17,026 to 59,007. According to a report by Policy Matters Ohio, a Cleveland-based research group, Butler County ranked 11th among the 88 counties in the state in per capita filings in 2004 and fifth among the 10 most populated counties.
 

There are multiple reasons for the increase. Between 2000 and 2004, as companies like Champion and International Paper closed local operations and others such as AK Steel cut hundreds of jobs, the unemployment rate in Butler County grew from a low of 3.6 percent to 5.4 percent last year.
 

But foreclosures can't be explained by job loss alone. Growth in foreclosure filings, both in the county and at the state level, took off in the middle to late 1990s. This was at a time when unemployment rates were falling and household incomes were growing, according to both state and U.S. Census Bureau data.
 

"This was when the economy was really riding high, in the late 90s, when this rate took off and skyrocketed," Policy Matters Ohio Research Director Zach Schiller said. "One thing that was happening at this time was major growth in the subprime market."

Subprime loans, with higher interest rates and fees, are typically made to borrowers with a history of credit problems.
 

But their growth also is not the whole story, Schiller said.
 

"Predatory lending is an element within that where people are getting into loans they are being deceived into and are being taken advantage of," he said.
 

The most recent national survey of mortgage delinquencies and foreclosures by the Mortgage Bankers Association of America showed that Ohio leads the nation in the percentage of mortgages in foreclosure at 3.28 percent more than three times the national average. When broken into prime and subprime loans, Ohio foreclosure rates still run around three times higher than other states. Subprime loans make up a slightly larger percentage of total loans in Ohio compared to the rest of the country, according to the delinquency survey.
 

Another factor is Ohio's low home appreciation rates.
 

Statistics from the Office of Federal Housing Enterprise Oversight show that states with the lowest appreciation rates also have some of the highest foreclosure rates. Ohio s annual appreciation rate in the latest OFHEO study was the second lowest in the nation at 4.47 percent, compared to the national average of about 12 percent.
 

Of the 10 states with the lowest appreciation rates, four (Ohio, Mississippi, Indiana, and Michigan) were among the nation s top 10 in foreclosure rates. Those with the highest appreciation rates, Arizona, Florida and Hawaii, all more than 20 percent, had foreclosure rates ranging between half and a quarter of the national average.
 

Richard Stock, director of the University of Dayton s Business Research Group, has been studying regional foreclosure trends since 2001.
 

Stock said it makes sense that homeowners in areas with high appreciation would have been able to sell their homes to cover their loans before having to go into foreclosure more easily than those in states like Ohio, where home prices have been virtually stagnant.
 

"You get rapid appreciation where demand is very strong and that gets back to some other economic factors that would indicate an area is doing well," Stock said.
 

Annual growth in foreclosure filings in Butler County dropped into the single digits in 2003 for the first time since 1997 and is expected to stay in single digits for 2005. According to the Butler County Clerk of Courts, 1,590 foreclosures were filed as of late November. At that rate, compared to 2004, growth would be less than 2 percent.
 

Schiller said it s good the numbers are leveling off, but it's important to remember they're leveling off at a high number.
 

Contact Chris Dumond at (513) 820-2025, or e-mail him at cdumond@coxohio.com

2004 foreclosures per capita
Community       2004 foreclosures    Population        Per capita rate
Ohio                      59,007               11,459,011        194.2
Butler County           1,782                    332,807        186.8
Trenton                       92                     10,294         111.9

Middletown                 422                     49,567         117.5
Hamilton                     492                     60,996         124
Monroe                        56                       9,362         167.2
Fairfield                      141                     42,378         300.6
Oxford                           8                      22,317      2,789.6
Sharonville                     3                         2,262        754
St. Clair Twp.                56                        7,679        137.1
Fairfield Twp.                 95                      16,633        175.1
Wayne Twp.                  26                        4,719        181.5
Madison Twp.                48                         9,645        200.9
Milford Twp.                  16                         3,906        244.1
Liberty Twp.                  99                       24,768        250.2
West Chester Twp.       148                        55,946       378
Hanover Twp.                22                         8,751       397.8
Reily Twp.                      7                          2,907        415.3
Ross Twp.                     16                         7,106       444.1
Lemon Twp.                   22                       10,752       488.7
Morgan Twp.                   8                         5,834       729.3
Oxford Twp.                    5                        24,679    4,935.8
 

Sources: Foreclosures, Butler County Clerk of Courts and Ohio Supreme Court. Population, U.S. Census Bureau.
 

Middletown Journal  12/11/2005

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