Better housing market leads to more foreclosure activity

Courtesy of the Associated Press

September 13, 2013

Ohio had the third-highest foreclosure rate in the U.S. in August behind Nevada and Florida as lenders moved forward with delayed foreclosure proceedings against delinquent homeowners, according to a new report released Thursday by RealtyTrac Inc.

Experts say the improving housing market is prompting lenders to start new foreclosure cases against homeowners that have fallen behind on their monthly mortgage payments. Lender activity is also rising to complete foreclosures and repossess properties already in the foreclosure process.

“I think it’s a combination of still a backlog of delayed foreclosures that needed to be dealt with in Ohio that the lenders are finally pushing through,” said Daren Blomquist, RealtyTrac spokesman.

“One of the reasons the lenders are pushing them through now, I think, is the market is improving. It may seem counter-intuitive, but it’s a better time for them to foreclose now that the market is improving because they have a better chance of recouping their losses on the property,” Blomquist said.

RealtyTrac, of Irvine, Calif., is a for-profit firm that tracks real estate information nationally.

One in every 537 properties in Ohio had some kind of foreclosure filing against it in August for a total 9,542 filings, including default notices, scheduled auctions and bank repossessions. That was the third-highest rate of activity in the country.

Foreclosure starts — the initial foreclosure action by lenders to file a default notice in county courts against property owners — spiked 44 percent from July to August to 2,998 default notices filed in Ohio, according to RealtyTrac. However, foreclosure starts are down approximately 27 percent from this time a year ago across the state.

Ohio was one of 17 states to see foreclosure starts rise month-to-month.

Additionally, the level of bank repossessions in Ohio rose 29 percent in August from July, and is 46 percent higher than it was in August 2012, RealtyTrac said. Lenders repossessed 3,583 Ohio properties in August, according to RealtyTrac.

As a result of the increased foreclosure activity, RealtyTrac listed three Ohio metropolitan areas among the top 10 U.S. metros for foreclosure rates in August — Toledo (#7), Cleveland (#8) and Akron (#10). Cincinnati was not included in the top 20 metros with the most activity.

“I have not noticed it,” Tom Hasselbeck, vice president and sales manager of Sibcy Cline Realtors’ Fairfield office. “We’ve been reporting in recent months a continual decline in foreclosed properties.”

Year-to-date through the end of July, 13,336 single family homes and condominiums have sold in the Cincinnati market including Butler and Warren counties, a nearly 23 percent increase compared to the same January-July time period in 2012, according to Cincinnati Area Board of Realtors. The average sale price per unit over that time 2013 is $166,395, up 7.8 percent year-over-year.

“The market I think is recovered enough to handle additional foreclosures, but it is always kind of going to be unknown how those are going to affect the market,” Blomquist said. “We’re past the crisis phase of this foreclosure problem, but we’re still firmly in the clean-up phase.”


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