Rate of foreclosures going to Sheriff sale climbs
Thursday, October 14, 2010 8:31 PM
VAN WERT - To anyone involved in the local real estate market or who pays attention to the legal advertisements in The Times Bulletin, it is no surprise that foreclosures have been on the rise ever since the economic meltdown two years ago. In fact, anyone paying attention to the news realizes this is not a local problem but a national one.
For many homeowners that have seen one spouse, or both, lose their jobs in the recession, foreclosure looms as a real consequence if they fall behind in their mortgage payments. A quick look at statistics going back three years shows just how much the rate has grown.
In all of 2007, 162 foreclosure proceedings were filed with the Van Wert County Common Pleas Court. In 2008, the number jumped by 25 percent to 202, and 2009 saw 210 foreclosure filings. Through October 13 of this year, 133 proceedings have been presented to the court. (*See graph)
Not all foreclosures go all the way to a liquidation. Some of the homeowners are able to work out payment plans with the bank or otherwise work out a way for the proceedings to be dismissed. So a second set of numbers must be examined - the number of those foreclosure proceedings that went all the way to a Sheriff's Sale.
In 2007, of the 162 proceedings filed, 86 were taken to a sale (49 percent). The next year saw 122 (60 percent) and in 2009, there was a drop to 97 (46 percent) that went all the way to a sale.
However, 2010 has seen a sharp increase in the number of homes that are going to the Sheriff for liquidation. Out of the 133 foreclosure filings so far this year, 115 - or a whopping 86.5 percent - have gone to sale.
An examination of the Sheriff sales show that a vast majority of them originated with brokers or were bundled for sale on the mortgage market, meaning that out-of-town banks have held the majority of mortgage papers on those Sheriff sales. To back that up, The Times Bulletin spoke with two local banks. One official said their institution had not had any foreclosures in the past 12 months but they had experienced a couple of homeowners just turning in the keys and relinquishing the houses. Another bank official said they had experienced a few foreclosures but in all but the most extreme cases, they had been able to avoid the process by working out plans with the homeowners.
Common Pleas Court Charles Steele told The Times Bulletin that the court has been keeping a close eye on the proceedings around the country as allegations of improper foreclosure paperwork and "robo-signings" where a bank official signs up to several hundred foreclosures per day. While those are extreme cases in other parts of the country, Ohio Attorney General Richard Cordray has joined with the other 49 state attorney generals to state they would be holding investigations into the foreclosure process.
Steele said that roughly 95 percent of the defendants in Van Wert County just walk away from the homes when faced with foreclosure and the bank receives a default judgment. Of the five percent who do not, they either use an attorney or contact the court in person or by letter to say that they are in negotiations with the bank, have filed paperwork for the federal government refinancing plan and have not heard back yet or they dispute some of the alleged facts presented by the financial institution. Those cases are continued until such time the problems are resolved or they go to trial.
For Steele, his main concern is to see the law is followed and all the paperwork is in order before any proceeding moves forward.
"If (the homeowners) dispute what is in that affidavit, then there is going to be a hearing in court and the bank will have to come prove (their position)," said Steele as he explained the homeowners' protection. "The homeowners still has a chance if they don't agree with what is in that affidavit."
He also pointed out that the "robo-signing" issue that has been brought up in other areas is really a breakdown in the entire system. When the bank officials sign the affidavits, they are affirming that all the facts contained within are true. But when they are signing several hundred per day, it is impossible for them to read and digest them all. He said the notaries involved in the processes could be in trouble as well since it appears they are not in the room with the officials when they sign the papers. Even though Steele said there has been no evidence in Van Wert that those sort of proceedings have occurred, he did offer a piece of advice to homeowners who are in the middle of a foreclosure.
"If they think that there is anything wrong with that (affidavit), they can go to a lawyer and file a response or just do it themselves," he said. "Here, if we get a letter from somebody, we treat that as an answer and then we set up an assignment conference and they get to come in."