Foreclosure times by the numbers
540 days on average to complete foreclosure in Ohio
3,414 new foreclosure cases filed January-July 2012 in Greene, Miami, Montgomery, Preble counties
10% typical drop in property values of homes within 500 feet of foreclosure in higher poverty neighborhoods
SOURCES: RealtyTrac Inc., clerks of courts, Federal Reserve Bank of Cleveland
It takes an average 18 months in Ohio to foreclose on a property, roughly six months longer than the national average, according to real estate data firm RealtyTrac Inc.
Local industry experts agree one to two years is common in the Dayton area, while the national average of 378 days.
The relative slowness in Ohio can cause some homes to sit vacant for extended periods and fall into disrepair, or become targets for vandals and arsonists. Foreclosed, empty homes also affect property values, municipal tax revenues and the services that rely on that tax revenue, such police and fire protection, said Tom Fitzpatrick, an economist with the Federal Reserve Bank of Cleveland.
“Each house that’s vacant, tax delinquent and foreclosed lowers every property within 500 feet about 10 percent. Those tend to be in higher poverty areas,” Fitzpatrick said. “When you sort of have these vacant, foreclosed properties in high poverty areas…it doesn’t take long for people to come and strip out metals, take out appliances.
“What was once a $100,000 home is now a $20,000 liability,” he said.
Before the housing crisis, it used to take six to nine months to foreclose a home, said Tom Kendo, a Centerville real estate attorney and chair of Dayton Bar Association’s real property committee. Now, nine months is considered short.
In Ohio, foreclosure cases must go through the court system. A homeowner has 30 days to respond after the initial complaint is filed. A notice of sheriff’s sale must be published 30 days ahead, at least. Before the sale happens, the house must be appraised. After a property is sold at auction, the plaintiff’s attorney has 30 days to file a confirmation of the sale.
It’s up to lenders to file the initial complaint, for a default judgment and for an order of sale to help move the process along, said James Drubert, Montgomery County court administrator.
Mediation programs, a bankruptcy filing, or agreements on loan modifications and short sales all add to the time it takes to foreclose, said Greg Greenwald, a Troy real estate agent for Prudential, One Realtors who specializes in distressed properties throughout the region.
“It’s a broken system, there’s no doubt about it. The banks are the root of the issue. The court systems might not be equipped to handle all of it,” Greenwald said. “It depends on how muddy the title is and (what) liens (exist), to how quickly it goes through as well because all those people have to be notified of the foreclosure.”
All of these required steps is lengthening the process. In the second quarter, the time between when a lender first filed a complaint against a delinquent homeowner in county courts to when the property was sold in a sheriff’s auction averaged 540 days, up from 535 days at the beginning of the year, 448 days a year ago, and 285 days at the beginning of 2007, according to RealtyTrac.
“It’s taking longer because the sheer volume of foreclosures has overwhelmed the current framework in place for processing foreclosures, from banks to foreclosure attorneys to the courts in states like Ohio where foreclosures go through the courts,” said Daren Blomquist, a spokesman for RealtyTrac.
“In an attempt to handle the huge volume of foreclosures banks and servicers started taking shortcuts to processing foreclosures and got caught red-handed in the so-called robo-signing scandal back in October 2010,” Blomquist added. “This led to another round of delays as lenders were then forced to re-evaluate and in many cases revamp the way in which they processed foreclosures.”
The Dayton area was one of the hardest hit in the state by the housing crisis, with foreclosure filings reaching as many as 7,000 cases in 2008. Things are still on track to be above 3,000 foreclosure cases this year in Greene, Miami, Montgomery and Preble counties, according to clerks of courts.
Scott Adams, Trotwood building administrator, said how long a property sits empty depends on where it is. He said it’s hard to tell if a property is empty just because of foreclosure.
“In certain neighborhoods you’ll have properties that sit for a long time. It’s all a gamble,” Adams said. “You have certain properties that sit in a more desirable neighborhood and those will sell quickly.”
Multiple foreclosures have sprung up in recent years on Knollcroft Road in Trotwood, said Sylvester Burch, a General Motors retiree, who has owned his home there for 25 years. One is the house next door, which recently sold for about $50,000, he said. Another one is a house across the street, empty now for about a year and a half. The homeowner was in foreclosure when he was hospitalized, and died in January, Burch said.
His property value dropped from about $110,000 to $80,000, he said.