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Candidates for Ohio State Senate’s 30th district are focusing on foreclosures, employment and education funds more than anything else.

Current Democrat member Jason Wilson opened the debate. Channel 27 FirstNews and Morning Journal sponsored the forum. The idea was to create a strong business environment that gave top priority to job creation. Also on the agenda were discussions on clean coal mining taking note of the fact that the area was sitting on 200 years supply of coal. He added, “We’ve been through wars; we’ve been through depressions, and we’ll get through this too.” He was referring to the foreclosure related economic slump.

Tim Ginter, the Republican challenger also started by speaking about employment saying that Ohio’s position was 37th in the nation as regards having the right environment for business. His answer to the economic woes was doing away with the estate taxes and even distribution of school funds. He strongly opined, “Unfair regulation is choking business.”

Wilson was of the opinion that it was the unemployment that was largely responsible for the increasing number of foreclosures in the region. He added that he had tried many times to help those facing foreclosure by taking an individual approach. He had sat at the kitchen tables with them and tried to open communication lines through churches and other agencies. He has also been active with other state leaders through Save Our Homes Task Force. He was focusing on increasing financial literacy and wanted the leaders in the government to set examples for others to emulate.

Ginter was also of the opinion that it was the job issue that has created the foreclosure imbroglio. As an immediate solution he wanted financial bodies and government sectors to come together so as to identify those facing imminent foreclosure and help them to pay off their debts. He emphasized, “Somehow we’ve got to release the pressure off the homeowners.” Ginter humbly admitted that he did not have the answer to all the problematical questions. He was of the opinion that the government should lower taxes so as to create the right atmosphere for job creation. Tax increases on a certain section of the population should be avoided. The way must be cleared for business was his view. He also wanted that business should diversify itself. Concentrating only on coal could lead to a collapse similar to what happened to iron and steel.

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A woman had to shoot herself before Fannie Mae decided to stop foreclosure proceedings.

Ninety-year-old Addie Polk has come to represent the agony of the foreclosure crisis hitting the common citizen. She was hospitalized after she shot herself twice hitting the upper part of her body on Wednesday 3rd October. Akron residents have come forward in support of Polk who is in a critical condition at Akron General Medical Center as on Friday 5th October.

Reacting to the incident Brian Faith of Fannie Mae said that foreclosure proceedings have been dropped and the property has been signed off ‘outright’ to her. He said, “We’re going to forgive whatever outstanding balance she had on the loan and give her the house. Given the circumstances, we think it’s appropriate.”

Rep Dennis Kucinich (D-Ohio) raised the issue of Polk on the floor of the House on Friday during talks on economic remedies. Kucinich quipped that the bill bypasses the fate of the Addie Polks of the world. It fails to tackle the problem of millions facing foreclosure. The focus of the bill is on Walls Street. As a result “the market may go up for a few days, but democracy is going downhill.”

When Polk shot herself the noise made her neighbour, Robert Dilon to use a ladder to enter the bathroom on the second storey. Some deputies nearby also heard the noise. Entering he kept calling her name but she was not responding. He found her prone on her bed just about breathing. A handgun lay by her side. Initially he thought that she kept it for self-defense. But when she turned her head and he saw the blood on her face he realized that the old lady had shot herself. Dilon rushed down to let in the deputies. Polk had left her car keys, pocketbook together with life insurance police neatly for anyone to find. It suggested her intentions were well planned.

The unfolding tragedy is that there are many like Polk – either older or younger. The foreclosure trouble was the same.

Polk had contracted a 30-year-old mortgage on her house in 2004 for $45,620 with Countrywide. On the same day she took out a line of credit for $11,380. The house was over a hundred years old. The following few years Polk began to miss out on mortgage payments on the house that her husband had purchased in 1970. In 2007 Fannie Mae took over the mortgage and initiated foreclosure proceedings.

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Mortgage giants Fannie Mae and Freddie Mac were asked to suspend foreclosure filings on mortgage loans by four democrat senators in the US. The Federal regulator and the newly appointed Chief Executive who have taken over the administration of the mortgage companies had instructed them to hold foreclosure proceedings temporarily in abeyance. Fannie and Freddie were instead advised to provide more affordable loans in lieu of their prior mortgage loans to the struggling borrowers in order to annul the foreclosure cloud looming large over them, especially the low-and middle income-group borrowers. The government insisted that the distressed borrowers remain in possession of their property availing of the more affordable loans in these times of crisis.

The Congress was mounting pressure on James Lockhart, Director of the Federal Housing Finance Agency, to use his resources in order to assist house owners caught in the foreclosure mesh. The senators, Menendez of New Jersey, Schumer and Brown of Ohio and Casey of Pennsylvania felt that the giant mortgage companies should implement whatever steps necessary to stop additions to the foreclosure list and subject them to “suffer the economic and personal disaster of foreclosure.” Fannie Mae and Freddie Mac had approximately $5 trillion in outstanding mortgages, which constituted more than half the country’s total. The ‘freeze in foreclosure’ that the lawmakers had urged the companies for, were to last for at least 90 days, and would not be applied to all the loans mentioned.

The Federal Government had seized control over the housing mortgage companies is a fervent bid to restore the housing market and the financial crisis that had engulfed the country and failed to show any signs of recovery for the past two years. Chief Executives of both the companies had been ousted and replaced and Mr. Lockhart had been advised to follow the example of Sheila Bair, Head of Federal Deposit Insurance Corporation although the conservative policy might add the burden on the taxpayers.
Bair‘s line of work was to urge banks to modify their lending policies and develop a comprehensive plan, which would offer a dignified solution to defaulting borrowers. The FDIC had first temporarily frozen house foreclosure, and went on to allow seriously distressed borrowers to swap loans at affordable rates. Fannie Mae and Freddie Mac were expected to work on the same lines. Mr. Frank, the Chairman of the Senate Banking, Housing and Urban Affairs Committee was to examine how the foreclosure prevention law was working.

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Court foreclosures are rare and most foreclosure take place out of court. This also depends on whether the there are problems with the title or if the mortgage does not have a provision allowing the lender the rights to sell a property on default. The foreclosure process starts when a lender gives attorney’s the necessary documents to foreclose on the mortgage. The attorney will then schedule the date for the sale of the property.

It is not really required by law, however certain mortgages require that 10 – 30 days before the sale, the lender sends a notice of default to the home owner, notifying them of the foreclosure process. Unless otherwise state by the mortgage documents, the borrower in default has the right to pay off the debt to the lender and cease the process, up until the date of the sale.

For the investor who is considering buying a pre-foreclosed property, there is a great deal of preparation and hard work required. The investor is required to work with the homeowner and even sometimes the lender to achieve this process. This is not easily achieved, particularly trying to meet with the homeowner. The goal essentially is to create a situation where everyone wins. The homeowner wins because they are freed of their default debt and will not have to undergo the foreclosure process, and the investor wins as he is then able to purchase the property at a really good discount.

The first thing to do is locate loans in default. This is achieved by means of the “Lis Pendens”, the first public notice that a loan is in default. Access to the Lis Pendens notices is found through the county courthouse and newspapers who routinely announce them. A reputable Ohio foreclosures for sale provider will also be in a position to provide a list of loans in default.

The default amount will be available on the legal notice and the market value of the properties the investor identifies will need to be estimated. Subtract one from the other to determine the gross equity of the property to evaluate the potential for profit. If there is very little difference in the debt and the market value of the property, this is not a viable property and another should be sought. If there is a large variance, there could be enough equity available in the property for the investor to make a tidy profit.

Contacting the homeowner is easier said than done, they are up to their eyebrows in letters and calls from creditors, attorneys and bill collectors and are feeling cornered. The only way to contact them is by phone or through the mail, chances are that neither of these routes are going to be easily accomplished.

It is best to start by writing a letter, tell the homeowner in the letter that you are a private investor who is interested in purchasing his property, and make him aware that you are able to help with his dilemma.

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Reports coming in from Ohio show that the tenants are the silent victims of the foreclosure crisis. Their voices remain unheard. The income of the ordinary people is also going down because of the foreclosure tornado.

With more and more people being evicted from their houses the demand for rented accommodation has gone up. A recent survey shows that tenants now occupy 30% of all the residential properties. Another reading shows that the income of Ohioans is going down. Tenants have few legal rights and are at the mercy of unscrupulous landlords as well as scammers.

In Cuyahoga County foreclosure filings are rising according to the findings of Policy Matters Ohio. The study is mainly concentrated in Cuyahoga County. It is a non-profit body without any party affiliations delving in economic research. Residential foreclosures increased by 8% from 2007. The number of foreclosed houses occupied by tenants also increased but at a higher rate than the previous category. Renters occupied 30% of the residential properties that were posted in 2007.

Tenants comprise of over a third of the population of Cuyahoga County. They suffer the same trauma as the owners occupying houses but with less focus and fewer avenues of redress or escape. They are not considered to be part of the foreclosure process.

Most of the families are hardly given any decent time before being asked to vacate. To shift suddenly they have to incur significant expenses. It dramatically changes their lifestyle. They usually lose their security deposits and have to pay higher rents for the next shelter and suffer the attendant costs of shifting and storage. For the average family it calculates to $2,500. A rough estimate is that tenants have suffered in all, losses amounting to $10 million.

Over 35% of the foreclosure postings of Cleveland counting to 2,586 and East Cleveland counting to 175 are related to rented houses. Most of the houses in the inner-ring suburbs suffered considerable rise in tenanted foreclosure listings. Report from Cleveland Housing Court show that number of houses being foreclosed having tenants have doubled.

The report suggests enacting of laws for the protection of renters at the state and federal level. Proper and timely notice should be made compulsory. Loans (with no or negligible interest) should be made available for renters to be able to shift and set up home again. The banks should focus on incentives rather than evictions.

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The Cleveland foreclosure crisis is worsening from day to day. The neighbourhoods of the city are dotted with vacant houses, owned by lenders or the banks. Financial bodies now possess more than 11,000 properties in Cuyahoga County according to project reports undertaken by Case Western Reserve University. The numbers account for more than half the units in Cleveland. The banks are selling these houses for peanuts to investors who are snatching them up for some hundred dollars!

James Odell Barnes has for 30 years been the first person Wall Street lenders called when they wanted to get rid of foreclosed houses. Currently Barnes is buying 100 houses in a week in Cleveland and Detroit. He is a broker and helps investors buy houses for as low a rate as $250 per house. In turn the investors sell them at a price that is 20 or 30 times higher than what they paid. David Green is a worker in a restaurant. He is seeing hand written signs on houses in the locality offering rent at less than half the price his restaurant is paying. Green has now entered the game and trying to fix a house he had bought for $18,000 in the middle of the town. Like him there had been 100 to 150 buyers who had bought similar houses from one Jeff Ball. Ball explains that he is meticulously matches the houses with the income of the potential buyers to make the transaction viable and affordable. This scheme greatly helps those with bad credit.

But it has not been smooth sailing for all the brokers. Some have become very unpopular. Destiny Ventures of Tulsa has been twice tried in court for violating code. They did not come to court and were unwilling to pay fines. The court seized a bank account to adjust one set of fines.

At this point another danger is brewing following on the footsteps of the foreclosure crisis. It is the investors who are buying up units for a song and then flipping them for neat profits. When local buyers are not available these sellers go online. Five buyers have contacted from Canada to buy houses in Toledo and Cleveland. The local administration is a bit worried about the influx of outsiders who might not be held accountable for the health of the locality, as they are interested only in the flipping.

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This time the women voters in
Clermont County are readying to battle foreclosures. The Clermont County League of Women Voters will be addressing the foreclosure problem during their meeting in May this year.

Foreclosures have churned into a national problem during the past few years. In Clermont County during 2006 there had been 2006 foreclosures as per figures released by Legal Aid Society of Southwest Ohio. In 2007 there had been over 1,000 foreclosures.

Analysts opine that there are three major factors behind this crisis. Firstly the credit standards had been too lax. It allowed people with modest income to be lured into buying houses they could ill afford. The temptation of no down payments and initial teaser rates were too much for them to resist. This predatory lending has harmed society and the economy. Predatory lending is that type of granting loans when the lender does not take into consideration the ability of the borrower to repay. On top of this the interest rates are usually very high. Loans were sanctioned after inflating the value of the property. But when the latter came down to realistic levels the loan amount remained higher than the price of the unit. Thus even by selling the house the borrower could not avoid the stigma of foreclosure. Predatory loans are also saddled with exorbitant pre-payment penalties making it impossible for the borrower to refinance.

Secondly the prices of essentials have suddenly started to increase. Medical bills, repair expenses have shot up while the income has often been going down if not been actually interrupted. Few weeks of unemployment will automatically lead to default in mortgage payments and end up in foreclosures.

The general depression in the economy has led to plants downing shutters. Layoffs have become common. Usually the income from two family members contributed to the running of the mortgage. Thus even if one lost a job the mortgage suffered. Illness and divorce have their negative impact also.

The women voters en bloc actively gave support to a bill passed in the previous year aimed at controlling predatory lending. The new law is being enforced now and it is hoped that it will address the abuses in the mortgage industry. The foreclosure on old loans however will continue to harangue society for many years to come. With interest rates rising there is apprehension that the country will be flooded anew with foreclosures.

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Four years ago Ellen Scrivens had bought a house. She refinanced her loan contracting an interest-only loan but two months later she lost her job and began to falter in her monthly payments. At the time of refinancing the lender had said that the monthly payment of about $2,000 included taxes and insurance. But in reality it did not. However with a running job she could have managed the installment. But six months without a job shook her foundations. Scrivens now sought the help of a counseling agency. She contacted Frederick County Action Agency, and Joe Baldi ex-alderman took up her case. Baldi and his colleague Peterson have taken the lead in this matter of helping people to stay on in the houses that are their homes.

Many people are ashamed to come out in the open about their impending foreclosure because of social stigma. The foreclosure fires rage on with no signs of the flames being doused. The numbers seeking help from FCCAA have doubled each quarter. It went up from 12 individuals in the third quarter to 24 in the fourth and jumping to 48 during the first quarter of this year. These numbers are just the tip of the iceberg. Thousands are in need of help.

Keith Patterson, a real estate agent blames defective government policy for this debacle. Even the state’s highest tax official, Comptroller Peter Franchot lays the blame on the Congress. For the last few years Washington has become the Wild West where any and everything is allowed. A price has to be paid by all for many years to come for this laxity he went on to add. They just looked the other way while all this was going on in the sub-prime category. The matter of minimum down payment, proof of income levels as well as floating interest rates was ignored. The lenders asked for 80% on the first mortgage, 10% on the second one and 10% on the third. Sometimes it was 80/20 contracts. The second and third agreements were at much higher rates ranging from 10% to 15%. At first the going was good but soon it became a problem for the mortgage industry when with falling real estate these mortgages could no longer be sold to Walls Street.

However the good news is that free help is available in Frederick County if foreclosure victims seek timely help.

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