New foreclosure filings have plummeted in recent years, both statewide and in the Mahoning Valley, with some local experts attributing the trend to an improving economy.
The 43,727 new foreclosure filings statewide last year reflected nearly an 18 percent decline from 2013 and more than a 50 percent decline from the all-time high of 89,061 new filings in 2009, when the economic recession peaked.
The figures were reported recently by the Ohio Supreme Court based on reports from county common pleas courts, where foreclosures are filed.
New foreclosure filings dropped statewide in 2014 for the fifth-consecutive year.
In Mahoning County, new foreclosures have dropped steadily from 1,819 in 2010 to 1,153 last year.
In Trumbull County, they’ve dropped from 1,249 in 2012 to 1,071 in 2013 and a mere 874 last year.
In Columbiana County, they’ve dropped every year since 2009, when there were 702, to just 361 last year.
“The decline in the mortgage foreclosure rate goes hand-in-hand with an improving economy,” said Debora Flora, executive director of the Mahoning County Land Bank, whose mission is to return vacant, tax-delinquent properties to productive use.
Flora said, however, the statistics provide “small comfort” to her because foreclosures create a legacy of “zombie properties that will continue to haunt us for some time.”
“Zombie properties” are those that have been foreclosed on by banks and vacated by their owner-occupants and for which there are no bidders in a sheriff’s sale.
Flora said she believes Mahoning County has thousands of such properties, which contribute to neighborhood blight.
Dan Yemma, Mahoning County treasurer and county land bank chairman, attributed the decline in new foreclosure filings to “a slightly improving economy throughout the state. Our area, of course, is a little bit behind, but we still are showing some improvement.”
Another factor in the decline is likely that, eventually, “you run out of homes to foreclose upon,” he added.
“The delinquencies kind of take care of themselves, either by foreclosure, or they are in some state of rehabilitation as far as their payment,” he said.
“I would much rather have someone on a payment plan than do a [real estate] tax foreclosure,” Yemma said, adding that he wants to keep homeowners in their homes and avoid the time-consuming foreclosure process.
“These numbers are positive, but we are not out of the woods yet,” Matt Martin, executive director of the Trumbull Neighborhood Partnership, said of the declining foreclosure filings.
TNP is a nonprofit community development corporation serving Warren.
“Foreclosures are down, but vacancies, walk-aways and overall blight are not,” Martin observed.
“After the initial wave of foreclosures devastated our communities, the lending industry learned that it did not want to be in the real-estate business,” Martin said.
“They are filing fewer foreclosures because they don’t want to own properties,” he added.
Albert J. Sumell, associate professor of economics at Youngstown State University, attributed the statewide and local foreclosure decline to continued low interest rates and increases in income and property values.
Sumell predicted foreclosures will continue to decline because he expects these economic trends to continue.
“Lending has expanded. Current homeowners are able to refinance at these lower interest rates,” the economist observed.
“It’s certainly good news, but it doesn’t mean, in and of itself, that the economic situation and outlook is great,” Sumell said of the drop in new foreclosure filings.
Sumell said he knows of no reliable statistics that document the whereabouts of people who lost their homes to foreclosure.
“I presume that the majority ended up [living] with either friends or family” until they could afford to rent an apartment, he said.
“I think that the rental community will continue to be strong for a while because people are going to need some time to rebuild their financial resources,” Flora said.
“They may not want to go back to homeownership for a long time, if ever,” she concluded.