As anyone who lives and breathes knows, 2009-2010 was not the best time for hanging onto a job, particularly in Ohio. The rising foreclosure rate is both systemic of, and and indicator of just how bad things have been in the Buckeye State. Nationwide a million homes were put on the foreclosure lists, and another almost 2 million are hovering someplace in the dreaded process of hitting the auction block. Ohio is, dubiously and interestingly, following the median track where bad news is concerned.
RealtyTrac, the California data supplier which specializes in foreclosures, predicts 2011 will be even worse for the industry. As if we have not had enough bad news already, only the most optimistic of industry experts venture to tell a better tale. These filings are the highest RealtyTrac has ever recorded, and Ohio has one foreclosure for every 47 homes. Some 20 thousand homes in the state were repossessed by the lender last year alone.
Though the broad reach of the foreclosure problem tends to be blamed on any number of other factors, the base cause today is because of job loss, wage cutbacks, and the logical range of inequalities that make it impossible for people to pay their bills. This is not about homeowners not budgeting or being sensible and sound in their home offices. It's about people going broke basically. Cindy Flaherty, Director of home ownership for the Ohio Home Finance Agency had this to say about the situation in Ohio:
"We continue to see unemployment as the major driver of foreclosures in Ohio. Even when people get re-employed, the wages they are earning aren't as good as prior."
The unemployment rate in the state peaked at about 11 percent in March of 2010, and the ranks of those defaulting reflected this non-traditional situation where home repos is concerned. Homeowners requesting assistance in the state have basically rung the phones off the walls at agencies offering assistance too. No one takes into account the vast number of people clinging desperately to their mortgages - the great pool of unlisted people on the brink of repossession. People all over are, as usual, living "paycheck-to-paycheck" only now those paychecks cannot help make ends meet.
The next time you read a "forward thinking" or even Alice In Wonderland forecast for the housing market in 2011, think of this. According to statistics there are 5 million more borrowers out there who are at least two months behind on their mortgage payments. Imagine having cut hours, even no job at all, and owing upwards of $2000 with no remedy in sight! RealtyTrac predicts there will be another 1.2 million homes repossesed in 2011, and this seems conservative.
If the economy does not get a major shot in the arm early in the year, it is possible that all 5 million of those borrowers can default. Only a small percentage would be invested in to recover if they were put on the stock market - think about it. The best advice is probably still a cautionary tale.
Original source, the Lancaster Eagle Gazette.