Report: State Maintains Lead in Foreclosure Rates

Hamilton Journal-News - December 15, 2005

Hamilton Journal-News

By Chris Dumond

HAMILTON – Ohio has maintained its distinction as the leading state in the nation in foreclosure rates, according to a report from the Mortgage Bankers Association Wednesday.

The report showed 3.17 percent of Ohio home loans in foreclosure in the third quarter this year, more than three times the national average of .97 percent. Locally, the Butler County Sheriff’s Office reported that 1,255 properties went to auction this year, up from 1,091 last year.

Butler County’s foreclosure rates are typically among the highest in the state. According to Cleveland-based research group Policy Matters Ohio, Butler was 11th of 88 counties in the state last year in foreclosure filings per person and fifth among the 10 most populated counties.

Foreclosure filings in Butler County more than tripled in the past decade.

Neighborhood Housing Services of Hamilton Executive Director Lorie Batdorf said much of the problem is rooted in subprime and predatory lending.

Subprime loans have higher interest rates and fees than so-called prime loans and are typically made to buyers who wouldn’t qualify for a normal home loan. Predatory lending can be more narrowly defined as inappropriate loans that take advantage of buyers.

“I think there’s a lack of education in the community, particularly among first-time home buyers,” Batdorf said. “A lot of this is emotionally-based. People go house hunting and fall in love with the house and it’s all emotional.”

With the rise in subprime lending and other kinds of nontraditional loans, almost anyone can get a house and that’s not always a good thing, she said.

“The difference between now and five years ago was that if you were credit-worthy, you got a loan and if you weren’t, you didn’t get the loan,” she said.

Although Ohio just recently surpassed Indiana in foreclosures, other neighboring states are getting in on the act, the Mortgage Bankers Association report showed. Indiana was second among the states in the third quarter with 2.69 percent of loans in foreclosure; Kentucky was third at 1.8 percent; Michigan was fifth at 1.61 percent; and
Pennsylvania was sixth at 1.58 percent.

Batdorf said the losses in manufacturing job losses shared by these states in the past five years are not entirely to blame for the foreclosures, but have contributed.

Others blame weak laws in Ohio governing the mortgage industry. Three reform bills now under consideration in the Ohio Senate are the subject of a predatory lending forum scheduled for Monday at LifeSpan on Ohio 4 in Hamilton.

The bills would expand Ohio’s Consumer Sales Practices Act to cover mortgage lenders, keep the private right of action intact so that individuals can sue lenders, limit points and fees to 5 percent of a loan, prohibit common predatory lending schemes and make public information related to the investigation of lenders.

Those interested in attending have been asked to RSVP to LifeSpan by calling (513) 868-3210.

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