Buying Foreclosure Homes in Ohio to Step Up
The number of first-time home buyers and investors buying foreclosure homes in Ohio is expected to step up after foreclosure filings soared in industrial and small towns across the state, based on data from the research organization Policy Matters Ohio.
According to the institute, foreclosure rates in small towns in Ohio are rising substantially compared to rates in urban areas because of the lack of housing agencies in rural areas ready to help distressed homeowners.
While many homeowners in urban areas lost their homes to foreclosure largely because of the risky loans they took out, most homeowners in small towns lost theirs to foreclosure because of unemployment.
In Ohio, which has been relying on the manufacturing sector for decades, a lot of breadwinners lost their jobs and their homes when manufacturing companies closed their operations.
In Zanesville, which has about 26,000 residents, families once depended on steel and coal operations. Now the town largely depends on distribution centers for goods set to be delivered to various areas in the Midwest.
Based on Policy Matters data, Ohio counties where investors buying foreclosure homes are expected to congregate are those counties in the hilly south or in the northwest where auto factories and supplier warehouses closed when U.S. auto sales fell sharply.
Cynthia Flaherty, head of the homeownership unit of the Ohio Housing Finance Agency, said the difficulties of manufacturing companies did not affect urban residents only because there are a lot of auto suppliers and manufacturers that located their operations in small towns.
In July, the unemployment rate of Ohio rose to 11.2 percent, higher than the 9.4-percent national jobless rate. The rate in Zanesville, one of the towns hardest hit by foreclosures, was 12.7 percent.
Shane Lightle, an officer at the nonprofit ESOP which is helping troubled Zanesville homeowners, said that over 80 percent of house sales in Muskingum County are foreclosures.
Part of the problem, according to Lightle, is the refusal of residents to ask help from government programs. Ohio small towns are known for their Midwestern work ethic, self-reliance and conservative principles.
In Highland County, thousands of workers were laid off when auto suppliers Johnson Controls and Weastec and freight delivery firm DHL Express shuttered their Ohio operations.
Despite efforts by Ohio residents to keep their homes, many are expected to let go of their homes to people buying foreclosure homes because of job losses.
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