Posts Tagged ‘ohio’

Foreclosures have hit the nation with Ohio being one of its worst targets. It has had its effect on the housing market where the sales have gone down by 16.8% from what it was in the previous year. This is according to the Ohio Association of Realtors. The example of the 10th Senate district can be cited. There were 10.4% lesser number of house transactions of sale and purchase. This is largely because of the increase in number of foreclosures. The Mortgage Bankers Association stated that Ohio has the highest number of foreclosures in the state.
Foreclosures affect not only the individuals and their families but also the entire community. Abandoned houses pose health hazards and attract criminals. This in turn causes the value of neighbouring houses to fall.

Ohio General Assembly and other state bodies are trying to find out legal means and programmes to protect Ohio from foreclosures. In September last year the Ohio Homebuyer’s Protection Act became effective. This made it compulsory for brokers and lenders to complete education course and obtain license before during business. It also included a note of warning that they could be hauled up by the court for any fraudulent activities contradicting the Consumer Sales Practice. The licensed brokers and agents would have to act bearing in mind the welfare of their clients. This would save consumers from predatory lenders.

Ohio state has announced with much fanfare its Save the Dream Foreclosure Prevention Public Awareness Campaign. To do so help has been taken of radio and television slots aiming to make the public aware of the grave implications of mortgage loans and the subsequent foreclosures that may follow if they delay action in seeking help.

The Bush administration in Washington is acting along similar lines so that borrowers are able to refinance to more affordable mortgages and thus avoid further foreclosures. The problem is that the worth of the property has now become less than the loan amount. This is because of the debacle in the real estate market following the foreclosure tsunami. The plan is that FHA lenders would forgive part of the loans by negotiating smaller mortgages. For this the lenders would get the support of the federal housing administration. House owners would also get free advise from government approved counselors. The contacts can be found over the website or a newly installed hotline. The dream of every American owning a house surrounded by a white fence continues to dominate the country.

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A recently given Ohio appellate court decision might give the teeth Ohio’s state government requires to halt increasing foreclosures.

Last December the attorney general of Ohio, Marc Dann was not successful with 40 foreclosure cases in the state. These could not be dismissed. However the ruling on 7 of these is still pending. Tom Winters, the first assistant secretary to the attorney general says that a ruling by the court on 20th March by the 10th District Court of Appeals , Columbus, might turn the tide in their favour. This might be applied to other similar cases.

The attorney general’s office wanted the 40 cases to be dismissed because Ohio had been named as the defendant. It is a routine process for lenders to name the state and sometimes the city as well as the county as defendants together with the name of the borrower. This is because it is presumed that there may be tax defaults. It is a sort of ‘shot gun’ approach. The motions were dismissed because the state did not have any interest in the unit. Some lenders backed out and the state was denied in other instances. But the state did not get the chance as yet to argue that the lenders could not show clearly who owned the mortgages at the time of foreclosure. The message is that they should get their cases clear before filing.

In another move the attorney general’s office is trying to see that low and modest income families get free legal help while working out a settlement with the lenders. It will be great if the pace of foreclosure filings can be slowed down so that houses are not abandoned. But so far nothing has yet happened to crow about.

In 2007 Ohio stood 7th in the national foreclosure ratings with nearly 90,000 properties in some stage of foreclosure. It calculates to one out of 56 houses being in foreclosure. The state however is keen to help the at-risk house owners. A free toll free numbers has been started as a help line. The programme has been named Save the Dream by which legal help and advice will be available to the needy. There are 8 to 10 personnel working in the office ready to directly talk with individual sufferers to see which remedial measures will suit whom. The programme officially made its debut on 1st April 2008.

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More than $3 million has been sanctioned by the Ohio Housing Finance Agency. It will enable counseling agencies to operate with counseling through 18 centres across the state. This $3.06 million grant emanates from the National Foreclosure Mitigation Counseling Program and it is part of $180 million action taken by the Congress in its fiscal 2008 appropriations bill. The programme funding is being activated through NeighborWorks America based in Washington DC dealing with housing matters.

How much each organization will get is not being specified until finalization of contracts. One of the beneficiaries will be Mid-Ohio Regional Planning Commission based in Columbus. In south east Ohio, the Corporation for Ohio Appalachian Development was declared qualified for the federal grant to serve the people of that region. Also on the qualified list was Community Action Commission of Fayette County southwest of Central Ohio. More than half of the agencies selected are concentrated in and around Cleveland. Foreclosures have been the highest making it rank sixth in the foreclosure race amongst all the metropolitan cities in the country.

The country is in the grip of a foreclosure tsunami. Although the primary accused is the sub-prime floating interest rate mortgage there are many other factors at play that have aggravated the situation – a situation that has caused whispers of recession being heard. Since 9/11 the stock market has been wobbly. There have been job losses. Detroit is one of the worst hits with the automobile industry floundering. Population levels have also gone down. Together with this medical bills have gone up and divorces being rampant have caused instability in the social structure. To add fuel to the fire a loan culture came to be aggressively sold via the credit card craze. It was thought that with money being pumped into the market by consumers, it would give the flagging economy a kick. Nothing happened. People kept on taking loans to get out of other loans. Into this mess crept in sub-prime loans meant to cater to those who could not qualify for prime loans because of modest income and shaky credit. The loans were aggressively peddled lured by commission and investment hopes. The general public were made pawns to snap up loans they could not run. The scheme backfired with lenders having taken on more foreclosures than they could digest. Foreclosures now dot the desolate land. No remedy has been found – only short term palliatives are being introduced.

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The Democrats have brought in a bill that if made effective will curb further foreclosures by changing laws related to bankruptcy. This was the opinion given by Senate majority leader, Harry Reid, Democrat from Nevada last Thursday. He apprehended that in all likelihood Republicans will block the bill. The test vote might extend up to Friday latest. If the Republicans stall the limited debate Reid will try to bring it back to the Senate floor the following week. He said that he would permit amendments to the bill that White House has threatened to veto.

He qualified his statement by adding that the amendments would relate to the present housing problems that has entangled 2 million house owners who are all set to face foreclosures and will not include other red hot issues like estate taxes. The Republicans in the Senate are scheduled to present their own interpretations of the housing bill on Thursday.
The clause in the bill that is causing controversy is about allowing judges to cancel bankruptcy debts.

If the bill is blocked by the Republicans Reid will manage to bring it back to the Senate floor sometime late the following week. By then the Ohio and Texas presidential primaries will be completed and the two senators, Clinton and Obama, backing the bill will return to Washington to give support to the legislation.

The criticism leveled by the Republicans is that the bill is actually a bail out to the lender’s lobby. The bankruptcy reform provision will give the right to judges to modify the principal of the mortgages on first time residences. The new measure is more bold than the economic stimulus package signed by Bush last Wednesday. This bill termed Foreclosure Prevention Act of 2008 includes many items that the Democrats had wanted to be incorporated in the original package related to economic stimulus. The Democrats in the Senate are keen to see the bill bypassed in the usual committee review process so as to fast track it for consideration when the Congress returns after the recess. The bill plays up to the popular sentiments of voters and there are many members seeking re-election. As such the bill must be enacted into law – opines many. Reid feels that in the face of an uncertain economy the bill is the right dose of medicine. The bill should be carefully considered so that those seeking help are nothurt by it.

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Across USA about 750,000 houses went into foreclosures. There are gloomy predictions that the number will rise to more than a million in 2008. With so many houses up for foreclosure auctions and sales, the real estate market is tottering with prices plummeting. This is the natural process of demand and supply. Houses not directly affected by foreclosures are also selling off because of criminal activities in abandoned houses.

Ohio is one of the hardest hit pockets. The foreclosure crisis is raging through Ti-state neighbourhoods. Foreclosures are whimsical – not caring about economic or social brackets. A drive through Tri-state neighbourhoods will show up many For Sale signs like pock marks on an otherwise smooth skin. Analysts have no heartening news – it will get worse before it gets better.
Andy Adams is also a familiar figure in the region during these troubled times. The lenders, usually the banks, contact Andy and his team. Their job is to secure the property after the previous owners have vacated it. It is brisk business with orders rolling in without a break. Locks have to be changed. The previous owners are given about a month’s time to collect their personal belongings
There are many ways of looking at the foreclosure problem Dan Hickman representing American Mortgage Company opines that foreclosure is a standard procedure by which the market corrects itself. He admits that the industry may have over reached itself in granting credit but that alone cannot explain the magnitude of this foreclosure fiasco. There are social reasons. Life styles have changed causing rise in illness and divorce – all resulting in decrease of income. Government regulations cannot rectify things overnight. Others from the mortgage sector say that the personal responsibility factor cannot be overlooked. The borrower is obliged to make the monthly payments for a loan that has been advanced to him or her. However all agree that the tsunami proportions of the foreclosure crisis cannot be easily explained away.

It is interesting to note that foreclosures are also touching upper class localities. Andy has worked on over 70 houses during the last two months. Immediately after Christmas he has four more on his list. Andy seems to be omnipresent!

Lawmakers are in a huddle wanting to tighten lending laws and insisting on lenders providing details. The Chief Justice of Ohio is requesting lawyers to be more cooperative with the foreclosure victims.

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In the lonely neighbourhood two large turtles were rescued from an abandoned foreclosed house in Discovery Bay. The turtles were lucky to be adopted by some school children. But one pit bull puppy was unlucky – it died tied to a fence in a backyard of Pittsburg. If people cannot survive the foreclosure attack what of the fate of the animals who are their pets?

Cecily Tippery specializes in foreclosed units is now busy rescuing abandoned pets from deserted houses. Right now they have their hands full taking care of a generous number of pets – all hit by the foreclosure wave. In a house in Antioch the group found a dachshund, beagle and Chihuahua huddled together with a dead turtle. In an Oakley house the only occupant was a Calico cat. Another house was crawling with a litter of kittens.

Abandoned pets are another grim aspect of the foreclosure crisis. More stories pet and foreclosure related stories are coming up from across the country.

In Ohio the animal welfare groups are in a huddle trying to find space for an increasing number of abandoned pets. In Arizona concerned pet lovers have set up an e-mail network to find homes for the foreclosed-pets. Stockton is at the centre of the foreclosure and Michael Parker an officer in animal services is a worried man. Thousands of evicted families have temporarily forgotten their pets.

So far there has been no detailing of the abandoned pets – unfortunate victims of the foreclosure fiasco. Stray news are pouring in but the problem is beginning to get attention says Paul Bruce of Humane Society of US. The problem can be understood. New landlords taking in tenants are often averse to pets. Many of the pets left behind by the foreclosure wave are too old or sick. They do not have veterinary records. Tippery falls within a ‘no-kill’ zone that makes the problem difficult to solve.

Contra Costa and Antioch do not have no-kill pet shelters. Agents are not happy about sending them there. The local rescue bodies do not have the funds to finance vet care for the abandoned pets. But work is underway by animal lovers. Individuals have paid for health checks of these foreclosure victims and they are hunting for adopters in an organized manner. It is heart wrenching to see not just toys left behind but living animals in houses that were once homes.

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In a statement the former mayor of Cleveland George Voinovich expressed his grave anguished concern for the ongoing foreclosure crisis in US. He is a senator from Ohio (R-Cleveland) and a former Governor.

He is especially concerned about the repercussions of the foreclosure crisis. Cleveland is his hometown and it is one of the worst affected zones. In his own locality three houses have been abandoned in front of his eyes – the owners have walked away leaving the properties to the mercy of vandals.

He had pitched in with others to revitalize the region with new sidewalks and saw to the repairs and maintenance works. For house construction he initiated a special tax abatement incentive. Now foreclosure clouds darken these same regions. One such locality is Slavic Village. It has the dubious distinction of ranking first in the foreclosure race. So on a very personal level he understands and realizes the sting of the foreclosure tornado that is sweeping through Ohio.
According to latest reports released by Mortgage Banker’s Association the foreclosure crisis is at its worst with Ohio being one of the hardest hit by it. It stands first with 3.72% of the loans slipping into foreclosures. The new law will allow three-year exception to the matter of debt forgiveness on house loans. There is also a clause that allows house owners to deduct mortgage insurance payments from taxable income.

An overwhelming majority by the House passed the second law, Expanding American Homeownership Act. By it Federal Housing Administration loan limits have been increased so that those facing foreclosures or resetting of interest rates will be easily able to refinance and move into safer harbours. The minor differences between the House and Senate bills will be ironed out and sent for the President’s signature in December.

The bill will give a fillip to the real estate market by bringing down the down payment condition from 3% to 1.5%. Consequently millions of Americans for the first time will get an opportunity to have a house of their own. This law also envisages a new counseling programme that will benefit those in the low and middle-income bracket.

Both pieces of legislation will be tools in the hand of the individual to preserve the sanctity and security of the home and the neighbourhood. There are still things to be done but a beginning has been made.

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Mortgage Bankers Association announced that during the third quarter of this year foreclosures have reached an all time record peak since 1986. Economist Campbell speaking with staff writer of Newsday, Wagner, said that this will have a wide impact on the general economy. It will affect all house owners and not just those branded as foreclosures. He is however optimistic that by the following year the real estate market will get back on its rails. Housing market is tossed around by several factors.

The foreclosed house usually ends up in the court auction. The lenders, who are usually the banks, do not want to sit on these units. That is why the banks are not motivated by high price. They are willing to settle for low prices and this tends to push down the general real estate market. There are more houses in the market than ever before – thanks to foreclosures.
The general story in the housing market is that for every buyer there is a seller. When a buyer sells a unit he or she usually does so to buy another house. But in the case of foreclosure an owner in distress is selling the house. A loan is being paid off. This does not leave anything left over for buying another house. Thus too many foreclosures lead to imbalances with the supply being more than the demand. This causes prices to go down and has far reaching implications for the economy starting with the immediate locality.’ For Sale’ signs dotting the region make the neighbourhood looks eerie and abandoned. Criminal activity sets in. Nature hates vacuum. With development pausing, labourers and builders find themselves without work. Suppliers and others connected with house décor suffer. It sets of a chain reaction that touches adversely each corner of the regional society and economy.

However the housing sector will recover opines the esteemed economist. There is a silver lining in the cloud. The sub-prime sector in the mortgage industry might be in the red but the prime category is still alive and kicking. It means that those with reasonable levels of income and can invest in a small down payment can still avail of housing loans. By next year things may stabilize although it is unlikely that there will be a housing boom again. Unless there is a general economic recession the market will become healthy once more.

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