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Cleveland leads the nation in new foreclosure filings, Ohio third among states

Posted at 7:11 AM, Apr 25, 2022

CLEVELAND — New numbers out show the nation’s foreclosure rate is on the rise with Ohio one of the states with the sharpest increase and Cleveland number one among all major cities.

ATTOM, parent company to RealtyTrac, the largest online marketplace for foreclosure and distressed properties, released its Q1 2022 U.S.Foreclosure Market Report. It found nationwide one in 1,795 housing units had a foreclosure filing in the first quarter, while in Ohio the number was nearly double that with 1 in 991 housing units, which was third highest in the nation behind Illinois and New Jersey.

Among U.S. cities with populations over 200,000, Cleveland led the way with 1 in 535 housing units.

Across the country foreclosures in March were up 181% from a year ago. A major factor is the ending last August of the federal moratorium on foreclosures leaving homeowners who paused payments over the pandemic to deal with overdue payments.

"During the pandemic, a lot of Federal Government programs aimed at making sure that the economy stayed strong have gone away and a lot of experts are saying that in particular is the reason that we're seeing the spike in foreclosures,” said Michael Goldberg, of Case Western’s Weatherhead School of Management.

Another major factor he said hitting struggling homeowners right now is simply inflation.

“Folks that are paying more at the pump or at the grocery store for groceries and gas to get themselves to work are having to make very hard decisions about where scarce dollars will go towards and they’re running behind on their mortgage payments."

Unfortunately, the way the Federal Reserve looks to bring inflation into check is by raising interest rates which cause yet another problem for some struggling homeowners.

"Certainly for those folks that may be able to refinance their mortgage and get lower rates and thus a lower monthly payment that ship has sailed and it's likely going to be a while until we see lower rates,” Goldberg said.

Another factor to watch in the future he said as those interest rates rise is the impact of that on those who financed with Adjustable Rate Mortgages or ARMs.

"That also perhaps not at this moment but as we move further into 2022 while folks rates are rising it's going to cost them more and that could impact foreclosures even more significantly."

A total of 50,759 U.S. properties started the foreclosure process in Q1 2022, up 67% from the previous quarter and up 188% from a year ago.

"Foreclosure activity has continued to gradually return to normal levels since the expiration of the government's moratorium, and the CFPB's enhanced mortgage servicing guidelines," said Rick Sharga, executive vice president of market intelligence for ATTOM. "But even with the large year-over-year increase in foreclosure starts and bank repossessions, foreclosure activity is still only running at about 57% of where it was in Q1 2020, the last quarter before the government enacted consumer protection programs due to the pandemic.”