Ohio Foreclosure Outlook

Job creation efforts by the Kasich administration will aid those struggling to keep up with their home mortgages and hopefully will remove Ohio from the top 15 highest foreclosure states. Decisive damage to the state's real estate market has already been done. County Sheriff's auction from 2008-2010 were partially a result from the peak 11 percent unemployment rate in Ohio. According to RealtyTrac more than 20,000 Ohio homes were repossessed in the last quarter of 2010.

Lawsuits stemming from the "robo signatures" debacle last year are still making their way through Ohio's court system. Improprieties by lenders prompted a temporary halt to many foreclosure filings in 2010 after attorneys for defaulting homeowners discovered a significant number of foreclosure notices were given without a proper review of the circumstances. Ohio currently averages one foreclosures for every 47 mortgaged homes.

Costly subprime loans, lenders and customers entering into loan agreements which were not financially feasible to the buyer in the long term and government quotas on Fannie Mae and Freddie Mac loans prompted the real estate meltdown nationwide. According to RealtyTrac the Ohio foreclosure crisis impacts not just low-income homeowners but more affluent buyers and those living in rural sections of the state.

Columbus Housing Partnership representative Loretta King stated a new type of client is emerging, the "new poor" of the middle and upper-middle class. Counties in Ohio with the highest rate of foreclosures include Marion, Licking, Delaware, Butler, Clermont and portions of Franklin County in the Columbus area.

RealtyTrac President Rick Sharga predicts 2011 as the peak year of foreclosures with an estimated 1.2 million more homes receiving repossession notices. Approximately 5 million mortgage holders are at least two months behind in loan payments. Although lending practices and government pressure to offer loans to less than qualified buyers or risk losing access to federally funded programs were major players in the foreclosure problem, industry experts are now witnessing an entirely different set of circumstances leading to repossession notices.

Sharga notes unemployment, costly medical bills and divorce proceedings are the primary reasons homeowners are defaulting on loans in 2011. The business friendly atmosphere fostered by Gov. John Kasich will put money in the pockets of Ohio workers and tax revenue in local government coffers.

Part in parcel to the individual financial impact of a foreclosure is the effect defaulting homeowners have on their communities. Local levies which fund schools, fire departments and law enforcement also suffer when property tax delinquencies rise, as they have in Ohio due to homeowners lack of ability to make loan and quarterly real estate payments.

A homeowner not in danger of default or owns their home outright is also negatively impacted by foreclosures in their neighborhood. A real estate appraiser must use current home sales as comparables when establishing the value of property for a sale or refinance package. The fact that your home is in impeccable condition and you have never missed a loan payment does not negate the decreased current market value a similar home in the same area has on the property appraisal. A bank cannot lend a potential buyer a higher amount of money to purchase your home than the current value established by the appraiser.