Ohio Foreclosures: Large Growth in 2003

     The number of Ohioans who lost their homes to foreclosure and sheriff sales grew again in 2003. Foreclosure filings increased 3 percent in Ohio, while sheriff sales of foreclosed properties continued to soar, up 26 percent from 2002. Those were among the findings of “Home Security 2004: Foreclosure Growth in Ohio,” a new report issued today by Policy Matters Ohio. Foreclosures usually occur when a borrower, unable to meet mortgage payments, defaults on a loan. Sheriff sales are the actual auctions of the foreclosed homes. Policy Matters Ohio analyzed foreclosure data from the Ohio Supreme Court and obtained data on sheriff sales by surveying the state‚s county sheriffs. Our research finds:

• During 2003, 57,083 new foreclosure filings were made in Ohio courts, up 3 percent from a year earlier, up 31 percent from 2001 and more than double the number in 1998.

• County sheriff departments put more than 36,425 foreclosed properties up for sale. That represents a 26 percent increase from 2002 and a 57 percent increase from just two years earlier.

• The number of properties put up for sale last year equated to about one in every 117 Ohio households. That compares to one out of every 185 households in 2001.

• The number of sheriff sales grew in 76 of the 81 counties for which we obtained data in both 2001 and 2003. Even fast-growing suburban counties such as Delaware, Warren and Medina saw big increases.

     The recent growth comes after a dramatic increase between the mid-1990s and 2001, as detailed in a previous Policy Matters Ohio study. There are some signs of improvement. Twenty-two Ohio counties experienced a decline in foreclosure filings last year, and a survey by the Mortgage Bankers Association of America found that new foreclosures started as a share of all 1- to 4-unit residential mortgage loans in the state fell in the first quarter of 2004 from the previous quarter. However, according to the MBA survey, Ohio ranks second in the country in new foreclosure rates, and those remain far above historical levels.

     A weak economy and predatory lending clearly are major contributors to the continued increase in foreclosures and sheriff sales. Among 57 sheriff departments that responded to a Policy Matters survey question asking about what was behind the foreclosures, 16 ranked job loss or a weak economy first among the factors. However, 31 cited predatory lending — deceptive, high-cost loans with excessive interest rates, fees and penalties. Predatory lending has grown with subprime loans, which are offered at higher cost than conventional loans to customers who have had credit problems. So far, however, the state of Ohio has not taken major steps to curb predatory lending practices. The report concludes with recommendations on how the General Assembly should respond to this issue.

     Policy Matters Ohio is a nonprofit, nonpartisan research institute that focuses on issues that matter to low- and middle-income Ohioans. The full report is available at www.policymattersohio.org/Home_Insecurity_2004.htm

 Copyright Homeless Grapevine Issue #66 September-October 2004 Cleveland, Ohio.