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Report targets underwater mortgages
By Karl Henkel
YOUNGSTOWN
Reducing underwater mortgages in Ohio could inject millions into the economy and create thousands of jobs, according to a report released Monday.
The Mahoning Valley Organizing Collaborative, which released the report in conjunction with the Ohio Organizing Collaboration and the New Bottom Line coalition, on Monday called for a moratorium on foreclosures and the principal reduction and correction of mortgages throughout the state.
“These are the same problems that every urban core in the country is facing,” said Adam Keck of MVOC. “There’s an underlying structural problem in the housing market.”
The report, titled “Ohio Underwater,” states that writing down all underwater mortgages could inject $36 million into the local economy.
A mortgage is underwater when a homeowner has more debt on his or her home than the current market value.
It also states that writing down mortgages could create more than 24,000 jobs annually in Ohio and save families $1.6 million on mortgage payments.
The report also states that Ohio families could save about $284 a month on mortgage payments, and presumably would spend that money elsewhere, bolstering the economy.
In the Mahoning Valley alone, the foreclosure rate currently sits at 4.7 percent, more than 1 percent higher than the national average. About 8.3 percent of mortgage loans are 90 days or more delinquent.
“We’re five years into a foreclosure crisis,” said Marco Barraza, a blogger on the OHIO FRAUDclosure website. “It’s crushing our economy and destroying the American family, American homes.”
Ohio’s unemployment rate was 8.5 percent in November, according to the Bureau of Labor Statistics, and Ohioans are expected to lose more than $17.2 billion in homeowner wealth, according to the Center for Responsible Lending.
Valley property values plummeted in the most recent re-valuation conducted earlier this year.
Values dropped 7.5 percent in Trumbull County and 7.4 percent in Mahoning County.