Archive for the 'Ohio Repo Homes' Category

Home foreclosure auctions in Summit County, Ohio bucked the statewide trend in 2009 when the number of homes sold through public auctions in the county plunged to its lowest level in seven years.

The county auctioned off only 1,317 housing units in 2009, a big decline from the 2,919 units sold off in 2008. The total value of homes sold last year was $92.3 million, a substantial drop from the $198 million in auction sales in 2008.

The drop in foreclosure sales last year is good news to most people, but housing analysts warn that the foreclosure sales decline is not yet a strong sign of market recovery. According to Mark Seifert, head of the Cleveland organization called Empowering and Strengthening Ohio’s People, the sharp drop in foreclosures was largely caused by the rising number of mortgage lenders not immediately pursuing sheriff’s auctions after getting court approvals because of the extremely low level of home prices.

Thomas Teodosio, Common Pleas Judge of Summit County, also said that many banks have been withdrawing distressed properties from scheduled home foreclosure auctions because they do not want to burden themselves with real estate taxes and maintenance costs in case the properties are not sold off. Teodosio, however, reiterated that he only approves withdrawals if the reasons are legitimate.

There are also other major reasons for the decline in foreclosures, according to analysts. These include foreclosure moratoriums, personal bankruptcies, short sale initiatives, court-ordered mediation and loan modification under the federal Home Affordable Modification Program.

County officials also reported that they conducted more auctions in 2008 than in 2009. Almost 5,150 foreclosed homes were scheduled for public auction in 2008, far above the 2,979 foreclosure homes readied for auction in 2009.

Across Ohio, foreclosure postings reached a record 85,773 filings last year, based on data from the Ohio Supreme Court. The biggest increases occurred in Medina, Portage, Lake and Geauga, where filings shot up by 10 to 15 percent.

While foreclosure activity slowed in the counties of Cuyahoga and Summit, they posted the two highest numbers in foreclosure filings in 2009, which are 13,858 and 4,113 filings, respectively.

Akron, the county seat of Summit County, has been among the most foreclosure-clobbered counties in the nation. Over the past five years, around 20,000 housing units in the county have been hit with foreclosure filings, and out of these distressed properties, over 10,600 homes have been sold off at home foreclosure auctions.

Carrington Mortgage Services, one of the largest subprime loan servicers in the country, has been sued by Ohio Attorney General Richard Cordray for its failure to carry out its agreement to help troubled customers prevent their houses from becoming repo homes.

The Attorney General, together with the Ohio Department of Commerce, claimed that Carrington failed to carry out the provisions of an agreement in January 2008 to modify loans to cut down foreclosures across the state. The lawsuit also claimed that Carrington violated state consumer laws with its failure to serve its customers.

In 2008, Carrington signed an agreement with the state to resolve the state’s dispute with defunct subprime lender New Century Financial Corporation, which was acquired by Carrington’s parent company Carrington Capital Management in 2007.

Cordray reiterated that the lawsuit shows that the state is serious in going after mortgage lenders and servicers who refuse to carry out the Making Home Affordable program by rejecting loan modification applications from their troubled customers.

He also explained the importance of stopping the continued rise in foreclosures as these feed the cycle of defaults that are blocking housing market recovery and economic resurgence.

In a recent report on foreclosure postings nationwide for the first 6 months of 2009, Ohio was ranked 12th in a ranking of states based on their foreclosure rates. One housing unit out of 86 households across the state was hit with a foreclosure filing, with nearly 59,000 households in default or in the last stages of the foreclosure process.

In June, Ohio had more than 11,000 households in various stages of foreclosure, with more than 3,000 units already counted as real estate owned properties. Ohio was tenth among states based on foreclosure rates in June.

Attorney General Cordray said his office sued to seek restitution for customers and civil damages and penalties.

Mortgage servicers are among the financial institutions expected to help slow down the pace of foreclosures because they are the ones collecting and distributing monthly loan payments from borrowers to investors. Months ago, more than 24 mortgage servicers committed to carry out the Home Affordable Modification Program, which provides cash incentives for all successful loan modifications worked out.

In response to the lawsuit, Carrington Mortgage emailed a statement to the media saying the lawsuit is meritless. The company claimed that it had completed loan modifications for about half of its mortgage borrowers.

The Federal Housing Agency released a report which concluded that Ohio’s problems of house repo increase and decline in housing values are rooted in the economic crisis and easy credit. The report debunked the myth that Ohio’s problems were caused by a housing boom.

According to the Federal Reserve Bank of Cleveland, there was not a housing boom in Ohio and so it could never be blamed for the current foreclosure and housing crisis in the state.

Federal Reserve Bank of Cleveland senior research economist Emre Ergunor explained that Ohio experienced a credit boom and not a housing boom. He pointed out that the credit boom still supported house prices. However, he clarified that Ohio did not get the kind of credit boom similar to that in California and Florida.

Data from the Federal Housing Finance Agency showed that Ohio’s home market prices increased 3 to 4 percent annually during the national housing boom from 2003 to 2005. Meanwhile, California’s home values jumped 14 to 21 percent annually and 12 to 27 percent yearly in Florida.

And since the last quarter of 2006, the home market value dropped by almost $4.2 trillion.

Meanwhile, many homeowners in the country have lost their properties to foreclosures.

Data from RealtyTrac Inc. showed that 342,000 homeowners received notices of foreclosure in April. Additionally, foreclosure filing rate for last month accounted for 1 in every 374 housing units.

The Federal Reserve Bank of Cleveland, which has jurisdiction on the regions of western Pennsylvania, Ohio, West Virginia’s northern panhandle and eastern Kentucky, has recommended several measures to address the house repo problems in the area.

The Fed recommendations included modification of loan terms of distressed homeowners facing foreclosure, demolishing vacant houses, aggressive enforcement of housing codes and allowing homeowners to rent and stay in their properties.

Ergungor explained that these recommended measures will not address and eradicate the fundamental causes of house repo problem and sliding housing prices.

However, he pointed out that the first goal of the Fed is to prevent the further decline of home values. After the goal to stop housing value declines has been achieved, the next step will be determined by the state’s demographics and economy.

According to the report, the state’s house repo problem started in several Ohio counties in 2000, driven by the rise in unemployment and not by the national housing boom.