THREE WAYS THIS MATTERS TO YOU
1. Home values — Distressed properties in foreclosure or short sale don't sell for full price. If there's fewer vacant, boarded up houses, and fewer properties selling at less than full value, that bodes well for surrounding property values.
2. Municipal services — The local government mows the lawn, and provides police and fire protection to vacant, boarded-up houses. "There's a direct cost to the city, township of maintaining that property."
3. Tax impact — The owner of a house in the foreclosure process is not paying property taxes or those property taxes may not be getting paid in a timely manner, which also impacts local government budgets.
SOURCE: Bill Staler, chief executive officer of LifeSpan Inc., a nonprofit financial counseling agency offering services in Butler, Hamilton and Warren counties.
Foreclosures filed against Butler County homeowners in 2013 dropped to their lowest level in a decade as the effects of the economic crisis slowly wane.
Last year, lenders and the county government filed 1,753 mortgage and tax foreclosures against local homeowners delinquent on their bills. Filings dropped 30 percent from 2,489 cases filed in 2012.
At one point during the worst of the recent recession, Butler County saw more than 3,000 new cases filed a year in 2009 and 2010. Many of those property owners had their homes repossessed, or the houses now sit vacant.
In fact, Butler County had Ohio’s highest foreclosure rate in 2011 and the second highest in 2012 for 1 in every 43 households being in default, ordered to auction or repossessed, according to RealtyTrac Inc., an Irvine-Calif. company that monitors foreclosure processing records nationwide.
The last time county foreclosure filings were this low, 1,758 cases were filed in Butler County Common Pleas Court in 2002, according to figures provided by the county clerk of courts office.
Better economic conditions are cited for the decreased foreclosure rate. Butler County Clerk of Courts Mary Swain also said many homeowners with unaffordable mortgages have already been through the foreclosure process, contributing to the drop.
Financial industry practices that lent money with little proof of income and ability to pay, and adjustable-rate mortgages with interest rate spikes set off a wave of foreclosures at the beginning of the housing bust. The housing boom and bust gave way to an economic crisis nationwide, that then led to job loss causing more people to lose their homes.
“In my opinion, it’s more about an improving an economy, but I also think it’s coupled with… the mortgages that were unrealistic,” Swain said. “I think those things all sort of caught up.”
It’s “now back to the point where more people are back to work or as I said, the ones that have been foreclosed, that’s done now,” Swain said.
The crisis’ lingering effects
Swain has worked at the clerks’ office more than 20 years and said the numbers are still historically high. However, Butler County rode a home building boom during the last decade and has more rooftops now than it did in the late 1990s. That growth is a factor in reports showing Butler County’s foreclosure rate swelled 457 percent in 2012 from less than 500 filings in 1995.
The foreclosure rate is never expected to be completely zero either, said Bill Staler, chief executive officer of LifeSpan Inc., a nonprofit agency that offers debt management programs, credit counseling, bankruptcy counseling, financial education and other services in Butler, Hamilton and Warren counties.
“We’re always going to have foreclosures. We’re always going to have a certain number of people because of medical issues, job loss, divorce,” Staler said.
Better economic conditions, stricter loan policies and government programs for mortgage modifications and refinances have all played a role in keeping more people in their homes, he said. But, as Staler points out, the foreclosure problem isn’t over yet.
“I think the good news is we’re through the worst of it, but I think there are some financial institutions that have stopped the foreclosure process because the value of homes were so far underwater,” he said.
An underwater mortgage is when the mortgage balance exceeds the worth of the property.
“Now that home prices are coming back and getting stronger, the ability to go back and start the foreclosure process again and get some money out of it is a possibility” that could lead lenders to file more default notices against property owners this year, he said.
Foreclosure activity statewide dropped in 2013 from 2012, a sign Ohio’s housing market has turned a corner, according to a new report released Thursday. The year before, foreclosure activity in the state increased from 2011.
Widely followed foreclosure tracking firm RealtyTrac Inc. said Thursday that Ohio was one of 40 states last year to see fewer default notices, scheduled auctions and bank repossessions filed against properties than the year before. Ohio activity decreased more than 12 percent to 78,488 filings of some kind last year, according to RealtyTrac, which monitors multiple stages in the foreclosure process.
Despite the gains, Ohio overall still had the fifth highest level of foreclosure activity in the U.S. when including defaults, auctions and completed repossessions, according to RealtyTrac. One in every 65 Ohio properties in 2013 was in some stage of the foreclosure process, according to the firm’s analysis.
Florida, Nevada, Illinois and Maryland had higher foreclosure rates than Ohio.
“I think foreclosure activity is dropping because Ohio has finally gotten past the backlog of delayed delinquencies or is getting past that,” said RealtyTrac spokesman Daren Blomquist.
Ohio “was a market that was hit very hard. We did see a surge of foreclosure activity in 2012. Even though the numbers are down, they’re still relatively high,” Blomquist said.
Ohio foreclosure cases completed in the third quarter 2013 took an average 627 days to process, between one to two years from the time a lender first files a complaint to when the property was sold in a sheriff’s auction, RealtyTrac said. The time to complete a foreclosure rose 5 percent from a year ago. Ohio ranks 10th-highest in the nation for the length of time to move foreclosures through the system, the firm said.
As a judicial state, foreclosure cases in Ohio must go through the court system.
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