Dropped foreclosures hurt

GAO: Ohio cities, surprised owners left with tab when banks walk away

Columbus Dispatch

Ohio is one of the states hardest hit by the practice of mortgage companies walking away from foreclosures they've already started, leaving homeowners and communities to deal with the blight and costly fallout.

A new federal report found that more than 50 percent of abandoned foreclosures it identified were in Ohio, Michigan and Indiana.

And seven of the 20 metropolitan areas with the highest numbers of abandoned foreclosures were in Ohio - with the Cleveland area ranked at No. 3 after the Detroit and Chicago areas, according to the report by the U.S. Government Accountability Office.

U.S. Sen. Sherrod Brown called for the investigation last year, after a Plain Dealer report on the bank-walkaway issue. Walkaways typically happen when lenders or mortgage servicers foreclose on a house but don't buy it or take it to sheriff's sale to see if someone else will.

The properties can become vacant, dangerous and corrosive eyesores that depress values of nearby homes, increase costs for local governments, and decrease property tax revenues.

Meanwhile, homeowners who thought they lost their houses might be surprised to later learn that the property remains in their names and they're on the hook for taxes and possible code violations.

"When banks abandon foreclosed properties, everybody pays the price," Brown said in a statement Monday. "Today's GAO report sheds new light on troubling practices by lenders who abandon properties. Too many servicers are foreclosing first and asking questions later - often foreclosing without evaluating local neighborhood conditions and economic impacts."

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