Avoiding Foreclosures In Cleveland?

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The Cleveland Height Patch is here to discuss foreclosures in Cleveland Heights. Michelle Simakis, editor of The Cleveland Heights Patch discusses further:

Avoiding foreclosure is a good thing, right? The mortgage-holders save money; the homeowner saves face and maybe even some credit rating points; and the neighborhood escapes the stigma that foreclosure brings.

The Obama administration has even encouraged lenders to avoid foreclosing on financially distressed homeowners by allowing short sales – meaning the lender accepts less for a property than the borrower owes.

Lenders haven’t exactly jumped in with both feet, as the numbers show. From July through September 2011, foreclosures in Cuyahoga, Lake, Lorain, Medina, Ashtabula, Geauga and Summit counties outnumbered short sales about 24 to 1.

There were 478 short sales during that period, compared to 11,744 auctions, according to the Northern Ohio Regional Multiple Listing Service.

Nationally, 30 percent of sales are short sales.

“That’s likely the high-water mark,” said Carl DeMusz, CEO of the listing services. “It’s likely going down.”

Howard Hanna real estate agent Cathy LeSueur is perplexed by the reluctance of mortgage-holders to embrace short sales.

“The banks are ridiculous,” she said. “They’ll reject the short sale, foreclose, let a house sit empty for two years and then sell it for far less than they would have gotten in a short sale.”

Furthermore, she said, “The banks know they’re stupid. They’re playing some kind of game on paper.”

Despite the grim odds, beleaguered homeowners aren’t giving up on the idea: people like septuagenarians Lorraine and Ben Eddy. (The names are pseudonyms; the couple prefer to remain anonymous.)

The Eddys have been working on a short sale of their home of 50 years since their agent, Paul Blumberg of Howard Hanna, delivered the bad news: According to his market analysis, the 87-year-old house’s market value had plummeted from $160,000 – its county appraisal before the housing market crashed in 2007-- to $49,900.

Read more at The Cleveland Heights Patch