Foreclosure Epicenter: Maple Heights, Ohio
By: Diane Tuman, Content Manager | September 4, 2007
It looks like Maple Heights, Ohio is the epicenter of the sub-prime mortgage meltdown. This is according to a depressingly grim feature article in Sunday’s New York Times Business section, “Can the Mortgage Crisis Swallow a Town?“ For homeowners, this scenario is like “Night of the Living Dead,” in which the bloodthirsty zombies are the equivalent of property foreclosures and the last, surviving healthy folks are running for their lives before they get swallowed up, too.
Maple Heights is in the top one-half of 1 percent nationally in foreclosures, according to RealtyTrac, a company that tracks foreclosure data. To add insult to injury, Maple Heights is located in Cuyahoga County (which includes Cleveland) and 30 percent of sub-prime mortgages are late or in foreclosure. The family depicted on the cover of the paper is not threatened by foreclosure, but they just want to get out of a neighborhood that is slowly turning into a ghost town. The domino effect of foreclosures should be a 101 class in economics as this new school year starts. Here’s how one town of 27,000 people is being affected:
- The town’s two swimming pools were closed
- Police and firefighter jobs have been eliminated
- Free snowplowing for seniors has been cancelled
- Tax rolls are 15 percent below projections, forcing a 50 percent increase in garbage collection costs
This list might not sound like much now, but with a dwindling tax base, county-wide economic problems, an overabundance of homes for sale and dwindling home values, this is not a pretty picture. Want to avoid a similar situation? Check out a recent Wiki Wednesday post on avoiding foreclosures.
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Spencer Rascoff on September 4, 2007 5:39 pm
I really hate to say “I told you so”, especially about a topic as tragic as this one, but I told you so.
http://www.zillowblog.com/the-tidal-wave-is-coming/2006/03/
north coast land lady on September 7, 2007 5:32 am
Simi Valley, CA in the late ‘60’s and early 70’s was a bedroom community for aerospace workers working “over the hill” at Litton, etc. When aerospace jobs went south, Simi became a ghost town - there were only 3 occupied homes on our street, we lost half the owners in our neighborhood over all. Gas “went up” to ALMOST $1 a gallon about the same time - people who still had jobs couldn’t afford to buy or rent in our area and THERE WERE NO REAL JOBS IN TOWN .. it took Simi more than 10 years to recover.
MyPhoenixMLS on October 9, 2007 10:35 pm
It’s important to remember why foreclosure rates are so high now:
The housing boom (especially in states like California, Florida, and Arizona) created a frenzied buyer environment in which many buyers who would not have bought before were able to buy homes with “creative” financing – low teaser interest rates, interest-only loans, and adjustable-rate mortgages that were uncommon before the boom. Even when buyers knew they wouldn’t be able to afford their mortgage when their rate adjusted, they figured that they could just refinance into a better mortgage – and that would be easy since property values were appreciating 50% or more each year.
But then when the market busted, homeowners found that they weren’t able to refinance their mortgages to get a better rate. And when rates adjusted, they found their mortgage payments were 10, 20, even 50% higher than they had been.
The housing frenzy also opened up a huge new market – subprime loans. Sure, there were subprime loans before the recent housing boom, but once housing prices starting skyrocketing, these lenders were coming out of the woodwork to try and get every family and their dog a loan – whether they could afford it or not.
According to a recent article in the online magazine Knowledge@W. P. Carey, “almost 37 percent of seriously delinquent loans (including loans 90 or more days past due and those in foreclosure) in the second quarter of 2007 are subprime adjustable rate mortgages (ARMs) — even though they make up only 7 percent of all loans.”
There’s a really informative blog post, “What’s behind the foreclosure crisis – and what you can do about it”, at http://bobstahl.topproducerblogs.com/.
Zindex World Series - Zillow Blog - Real Estate News and Analysis on October 22, 2007 2:32 pm
[…] the deciding game of the ALCS. And we also won’t bring up the fact that you guys are at the epicenter of the mortgage meltdown. We feel for you, Cleveland! But, time to make room for the Boston Red Sox vs. the Colorado Rockies […]
Free Foreclosure Help on February 22, 2008 7:26 am
Maple heights is very bad. Much like the Inland Empire in Riverside Ca. where I reside. There is an area where I live here is Corona where 1 in 3 homes are in foreclosure. It’s scary!
Mark Jones on March 5, 2008 10:26 pm
Most of the foreclosures are due to adjustable rate mortgages(ARMs). Many homeowners who got adjustable rate mortgages (ARMs) on their properties when rates were at an all-time low. Now those adjustable rates have increased and many homeowners find themselves making payments on homes that have no equity or even have negative equity.
There is still hope for homeowners in foreclosure. There is a good site where homeowners in foreclosure can get help. Home Search
andrew on March 13, 2008 5:46 am
The agreement between the lender and the borrower is called a mortgage or a deed of trust. Usually foreclosure is resorted to when the borrower defaults on payment and the agreement is secured by a lien on the proper. To avoid it is better to know the entire details about the laws of foreclosure before we get in.
Sue Countrywide Home Loans on April 1, 2008 8:53 pm
These people need to bring a lawsuit and sue these creeps, NOW!
Loan Modification & Mortgage Help on April 1, 2008 8:55 pm
Lawsuits are not the way to go. I am a lawyer and I know the best way is to mediate. Homeowners have a lot of power these days.
Foreclosure Guy on April 15, 2008 5:00 pm
That is so sad, I wonder how long until we see a rebound in the mortgage market, and in the Ohio mortgage market.