Ohio Mortgage Troubles Mount: Foreclosures, Fraud on the Rise
Leslie St. Clair knows the Ohio mortgage foreclosure rate is among the highest in the nation.
She also knows, according to the Canton Repository, what life is like as part of that statistic. Her home is slated to be auctioned off later this month.
“I’ve lost a lot in ’06,” St. Clair, 44, said. “I’m just hoping ’07 is a little bit better for me.”
Her property was one of 2,781 targeted for foreclosure last year in Stark County, said Clerk of Courts Phil G. Giavasis. Ninety-one percent involved Ohio mortgages, while the remainder were tax foreclosures.
A lack of jobs, high gasoline prices and high mortgage interest rates - particularly on adjustable-rate mortgage products that fluctuate - all take their share of the blame for the number of foreclosures.
St. Clair said she had a fixed-rate loan with pretty good mortgage rates, but found herself in trouble after being laid off in 2003.
She worked at GE Consumer Finance, making $12.65 an hour, but could only earn half that amount working as a substitute for Canton City Schools. It wasn’t enough to keep up with the bills.
“It’s just been tough finding work. Stark County is a hard place,” said St. Clair, who eventually found a new job but not before she was far down the road to foreclosure.
In November 2005, she fell behind on her loan payments for good. She tried to work with the home loan lender, but the company wanted the delinquent payments handled first, she said.
“Finally, I just gave up,” St. Clair said, describing her mind-set as, “If ya’ll want the house that bad, I just quit.”
In Cuyahoga County, community decay brought on by predatory lending and fraud schemes has prompted action from Prosecutor Bill Mason. Last week, a grand jury indicted 72 criminal defendants in three cases.
Dishonest lending practices, such as pitching a low-interest “teaser rate” but not delivering, are part of the problem, Mason said.
When his office started investigating foreclosures, he thought sub-prime lenders, who give money to borrowers with bad credit, were to blame. But it appears those companies have given many bad credit home loans based on fraudulent documents submitted by mortgage brokers and buyers.
The scam works like this: The brokers, buyers, sellers and appraiser get a loan with fake documents, each takes a cut, the house sits vacant, then goes into foreclosure while the neighborhood suffers, Mason said.
More indictments are coming.
“I anticipate we’ll continue the process until, and if, we rid the community of the problem,” Mason said.