Foreclosure Crisis: No End In Sight

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The mortgage crisis isn’t going anywhere. New figures indicate more foreclosures than reported a year ago. WOSU reports Columbus’s has been unable to escape the economic downturn.

“It’s the end of the road. It’s time to go.”

That’s what Dee Baker said of her friend’s home that was sold at the Franklin County Sheriff’s auction on Friday. Baker’s also employed in the mortgage industry at Huntington Bank.

“The individual who was in the home, supposed to be making payments, I believe his business failed. So he had no income and was not able to keep the house,” Baker said. Stories like Baker’s friend have been commonplace for a few years now, and according to some industry experts, they likely will be for some time.

In the first quarter of this year, Franklin County saw almost 2,800 home foreclosures – a nearly 14 percent increase over the same period last year. Sherry Dufford, who works in the real estate office at the Franklin County Sheriff’s office, gave a snap shot of what a typical week looks like.

“One day I got 83. The next day I got 68. One day I received 47. And another day I received 65,” Dufford said. In case you can’t add that fast, that’s 263 new foreclosed properties in one week that are up for auction.

“It’s been like this for us for the last since the last time you’d called in for the interview,” she said.

WOSU last spoke with Dufford in October 2008. At that time there were as many as 230 properties pending sheriff’s sale a week. Almost two years later, more than 800 are scheduled for auction just in the next month.

While Dufford said she’s hearing from attorneys that foreclosures are slacking off, she said they’re not on her end.

“I don’t know if it’s something they already had in the process, and it finally got to the point where they could file. I’m not quite sure. I mean, the opinion of everybody in here, we’re not seeing it slow down for us because we have not seen numbers being reduced dramatically. Just for the example of last week: All those orders of sales we got in each day. To me, I don’t, I don’t think it’s slowing down,” Dufford said.

The reason why Dufford has not noticed a decline in the number of homes up for auction is because the number of filings continues to increase. At least that’s what Linda Cook said. She’s an attorney at the Ohio Poverty Law Center and works in foreclosures.

“I think that there’s just more people that are delinquent and I think banks and lenders are just working their way through that,” Cook said.

The number mortgage foreclosures reached a crisis level about five years ago in Franklin County. And last year, Franklin County saw 9,500 foreclosures. Cook said while the number of filings appears to be leveling off now they’re still in her words “unacceptably high.”

“They continue to go up, but not quite at the rate as they did say in the jump from 2000 to 2006, which there were just incredible increases every year,” she said.

Amy Klaben with the Columbus Housing Partnership would probably agree. Klaben’s their CEO and has seen the number of people lose their homes increase drastically over the last five years.

The Columbus Housing Partnership, which offers a variety of free services for people facing foreclosure and job loss, has gone from seeing 250 clients a year to about 1,600. And there’s no end in sight.

“The people who are behind on their mortgages still have a way to go before there’s resolution. And until we see a major change in the economy, locally, with jobs, we will continue to see people having difficulty paying their loans,” Klaben said.

Sub-prime mortgages kicked off the foreclosure crisis. Then astronomical unemployment rates fed it. Linda Cook said some experts are worried there will be another huge wave of defaults as adjustable rate mortgages reset next year.

“That’s going to be a problem for people who have their payments adjust in the current economic climate in Ohio with the double-digit unemployment rates. It’s going to be a real problem for people who are now may be struggling to make their payments, but are making their payments, when their payments adjust upward – because they never go down,” Cook said.

Dee Baker see a similar picture from her view at Huntington Bank. She said a return to what she called a “normal” housing market is still several years away.

“I think we will not return to what is considered “normal” until around 2013. The key to recovery is employment,” Baker said.