House Foreclosure - Ohio Bags Top Ranks In Foreclosures

Ohio Bags Top Ranks In Foreclosures

December 10th, 2007

During the third quarter foreclosures reached record breaking peaks. As regards percentage of loans Ohio ranked first. In delinquencies Ohio came 9^th. Delinquency is the pre-foreclosure stage where the borrower is lagging behind in payment but has not been served the legal notice as yet. The Mortgage Bankers Association has released the report. A survey has been made of 45 million houses across the country.

Mortgages starting off on the foreclosure process rose to 0.78% during the last quarter. In the previous second quarter it was 0.65%. In Ohio the rate of foreclosures kicking off was 1.17%. The rate of all loans in foreclosure was 3.72%.

The delinquency rates also saw a rise – all mortgages rose to 5.59%. In the previous quarter it was 5.12%. The third quarter figures created a record - the highest since 1986. In Ohio the reading was 7.24%.

Of all the loans the sub-prime category of ARM’s accounted for only 6.8% but it contributed to 43% of those slipping into foreclosures during the third quarter.

In the regions where there are more houses ready to be auctioned than buyers the real estate market has begun to slump. In Michigan and Ohio the problems are being complicated by employment loss. To make matters worse people are leaving by droves.

In California more and more buildings that had been used as pawns in the speculation business are being foreclosed. Ohio, Michigan and Indiana are the top rankers in serious delinquencies, foreclosure listings and foreclosure startings.

President Bush after discussion with lenders and discussion with Treasury Secretary Paulson, has announced recently a five year freeze on certain types of mortgages. It would prevent rate hikes and thus give the borrowers time to breathe and find out escape routes. The aim of the government was to check another tide of foreclosures involving about 2 million sub-prime mortgages. If rates had been allowed to rise then foreclosures would have been inevitable. The introductory rate of 7% to 8% was scheduled to jump to 11%!

The sub-prime aggressive foisting of loans on unwary borrowers is largely blamed for this crisis. The initial rates were teasers and many fell for the trap. Apart from homebuilders there were speculators investing for quick profits in a booming housing market. But with millions failing to meet the exorbitant rise in interest the whole plan went awry.