Complexity and Change in the Foreclosure Process in Toledo, Ohio

Abstract

This paper analyzes the characteristics of foreclosure cases in Lucas C ounty, Ohio, from 2004 to 2008. We use a rich source of secondary data to track foreclosure filings through the legal process to their ultimate result in either the loss of a home or the dismissal of the case. We supplement the secondary data with interviews from officials involved in the process and with a discussion of the changes that have occurred during the foreclosure crisis. Our analysis suggests that the process has accelerated slightly despite the increase in cases and that basic interventions have substantially reduced the number of foreclosure filings that eventually result in the loss of a home. Unexpectedly, the characteristics and results of the process seem to vary little across income categories and neighborhoods. In addition, while most foreclosure cases are straightforward in a legal sense, there is evidence of larger trends that are introducing increasing complexity into the process.

Keywords:

• foreclosure
• homeownership
• abandoned property

Notes

^1. These numbers are based on a RealtyTrac estimate of 92,432 repossessions in April 2010 and more than 2,500 sheriff's sales in Lucas and Wood counties in 2009.

^2. The Lucas County Recorder's duties include indexing and maintaining land records and other miscellaneous documents. In several processes, including land transfers, the sale of liens, and foreclosures, the process is not legally complete until the appropriate documents are submitted to the Recorder's office.

^3. Newman (2010) uses the term preforeclosure to indicate what we term the foreclosure filing.

^4. As is clear from our findings, the foreclosure process is usually completed within about two years. We began our data collection in 2010 and, therefore, limited the foreclosure sample to those filings made before the end of 2008.

^5. This website is available to the public but is password protected. Anyone can be assigned a log-in ID and password by filing a short form, in person, at the Recorder's office.

^6. Deutsche Bank has been involved in some interesting activities in Lucas County as well. In our sample of foreclosure filings, we found three instances where Deutsche Bank purchased, pooled, and secured mortgages several months after foreclosure filings had been made on the properties by other financial institutions. Deutsche Bank later joined the filing as a new plaintiff, but it suggests that at least one major financial institution was securitizing mortgages that were already in the process of foreclosure.

^7. It probably did not help the plaintiffs that Boyko had spent nine years on the Cuyahoga County Common Pleas Court and probably heard hundreds, if not thousands, of foreclosure cases during that time (see http://www.ca6.uscourts.gov/lib_hist/courts/district%20court/OH/NDOH/judges/cab-bio.html).

^8. Whereas the sheriff's sale typically indicates that a foreclosure has been completed, Ohio law allows remedy for the defendant until the sale has been confirmed by the court. There were two instances in our sample where a sheriff's sale had occurred, but the defendant (homeowner) was able to reclaim the property. Unfortunately, in one of those cases, the property was lost to a later foreclosure.

^9. Toledo has several counseling agencies that have served thousands of homeowners but do not provide legal assistance. The Toledo Fair Housing Center has long had a national reputation for housing advocacy, and the Magistrate's office singled out another counseling agency, Neighborhood Housing Services of Toledo (affiliated with NeighborWorks), for their efforts.