LIMA — Foreclosure activity has reached its lowest point here since 2006, rendering the housing crisis a distant memory for many in west central Ohio.
Allen County has seen foreclosure activity decline by about 79% since the height of the housing crisis, which peaked here around 2008, according to a recent report from Attom Data Solutions, which tracked default notices, scheduled auctions and bank repossessions across the U.S.
The report found 158 foreclosures in Allen County last year, compared to nearly 750 foreclosures in 2008.
“It’s night and day,” said Timothy Stanford, an agent with Superior Plus Realtors in Lima. “Going into 2008, 2009, 2010, we had three times as many homes available for sale. There were no buyers. The pendulum has swung. We now have three buyers for every house for sale in that middle part of the market.”
The trend was fairly consistent across the region, with only Van Wert and Mercer counties seeing a handful of new foreclosures last year, according to Attom Data Solutions data.
Todd Teta, chief product officer for Attom Data Solutions, expects foreclosure activity to continue its decline in Ohio in 2020, so long as the economy remains robust. He pointed to rising wages, a strong stock market and low interest rates as positive indicators for the state’s housing market.
“Those gains produce more resources for homeowners to keep up with their mortgages,” Teta said. “In addition, historically low loan rates make it attractive for homeowners to refinance and lower their monthly payments. More money to make smaller mortgage payments points in the direction of falling foreclosure rates.”
The Consumer Financial Protection Bureau, which was established in 2011 to protect consumers from unscrupulous lending practices, “tightened things up,” Stanford said.
“They wanted more documentation and wanted lenders to be responsible for that,” Stanford said. “The default rate has dropped precipitously.”
About 1.8% of Ohioans were 30 to 89 days behind on their mortgages as of June 2019, while another 0.7% were at least 90 days behind, according to the U.S. Consumer Financial Protection Bureau.
Compare that to the peak of the housing crisis: In January 2010, for example, 3.8% of Ohioans were at least 90 days late on their mortgage, and another 4% were at least 30 days delinquent.
“There’s nothing that shows banks are loosening up their lending practices right now or interest rates are suddenly going to rise,” said John Navin, dean of the Dicke College of Business Administration at Ohio Northern University.
Stable interest rates are important for people with variable mortgage rates.
As long as interest rates stay where they’re at, Navin said people who qualify for those rates will be able to make their payments. And those who would like to refinance their mortgages are more likely to afford it now, Navin explained.
Because foreclosure activity is often a lagging economic indicator, Navin said the foreclosure market should stay stable for the foreseeable future, absent mass layoffs or an economic downturn.
“Of course, things could change if any of those blocks get pulled out from the market foundation,” Teta said. “Rising loan rates or a slowing economy, predicted by many economists, would most likely lead to foreclosure increases. But for now, it’s reasonable to predict that foreclosures in most areas of Ohio and the nation are not headed for an increase.”
Reach Mackenzi Klemann at 567-242-0456.