Foreclosures rates flatten, could rise

CLEVELAND (AP) — Thousands of troubled mortgage borrowers jumped at the chance to shape up their finances, underscoring continued home-lending market problems in Ohio despite a recent flattening of foreclosure levels.

“We’re just barely making it,” said Michael Bryant, 35, of Cleveland, one of the first homeowners to show up at a four-day foreclosure-prevention fair sponsored through Monday by U.S. Rep. Marcia Fudge, D-Ohio.

“We can’t do the extra things that we normally used to do,” said Bryant, a machinist who was hoping to lower his 7.25 percent interest rate and $1,000 monthly mortgage payment. While current on his payments, Bryant said, he and his wife must make financial sacrifices that a lower rate might help them avoid.

Letitia Reynolds, 40, a single mother living in Bedford, said lowering her 5.8 percent mortgage rate would relieve stress. “I’m trying to get things under control,” she said.

Like much of the Rust Belt, Ohio’s foreclosure rates skyrocketed early in the mortgage crisis, fueled by the loss of manufacturing and auto-industry jobs. The weekend fair attracted more than 5,000 advance registrations.

Other regions caught up last year as the mortgage industry buckled under pressure as homeowners were unable to keep up with adjustable-rate payments.

In a possible signal that Ohio’s mortgage ordeal may be easing, the state dropped out of the Top 10 list of states with the highest foreclosure rates in the first six months of the year, according to foreclosure listing service RealtyTrac Inc.

Ohio’s foreclosure rate was seventh-worst in the nation last year, with 2.25 percent of homes in foreclosure, or 146,099 filings. According to RealtyTrac, Ohio’s rate was 12th-worst in the January-June period at 1.16 percent of the homes affected, or about 59,000.

Foreclosure filings in Ohio dropped 14.7 percent to 11,252 in June, compared with June 2008.

Though recent months show a decline in the state’s rates, that trend comes amid historically high rates for Ohio, according to Rick Sharga, senior vice president of RealtyTrac.

“You have to take the numbers with a grain of salt when it comes to looking for a return to the good times for the state,” Sharga said in a telephone interview from Washington, D.C.

Gael Fawley, who watches foreclosure and bankruptcy filings in the suburbs east of Cincinnati as part of a Clermont County program, said foreclosures have been consistent this year at 10 to 20 each week. And she worries that the pace could quicken.

The big wave of foreclosures over the past year reflected troubled borrowers, and Fawley thinks recent layoffs will create a new spike in filings. “I think that’s consistent throughout Ohio,” she said.

In addition, the recent flat pace of foreclosures may be due to a surge in bankruptcy filings, which halt foreclosure proceedings, she said.