The number of properties nationwide in foreclosure dropped by 25 percent in February, but in metro Toledo, the trend went the opposite way: foreclosure numbers rose sharply.
Properties in foreclosure in a four-county area that includes Toledo jumped 52 percent in February from the same month a year ago, and they were up 104 percent from January, according to RealtyTrac, a real estate data firm in Irvine, Calif.
Overall 749 properties in Lucas, Wood, Fulton, and Ottawa counties were either in bank-owned or various other stages of foreclosure. That equaled one property in foreclosure for every 402 housing units in the metro area.
In Ohio, properties in foreclosure rose nearly 12 percent in February compared to a year earlier, and they were up 26 percent from January. Nationally, they were down 25 percent from a year ago and up just 2 percent from January, according to RealtyTrac.
Daren Blomquist, vice president of RealtyTrac, said that while the resurgence in foreclosures in metro Toledo may seem alarming, it is a trend that appears to be happening in several U.S. metro areas that previously had been seeing foreclosure activity decrease.
“We are seeing other markets with this kind of rebound in foreclosure activity in recent months. Ohio is more recently starting to see that, but we’re also seeing it in Florida and Illinois markets over the past year now,” Mr. Blomquist said. “In New Jersey and New York in just the past seven months we are also starting to see this rebounding activity.”
Metro Toledo’s re-eruption of foreclosures began in the second quarter of 2012. Prior to that the numbers were decreasing, Mr. Blomquist said. Last August, foreclosure activity soared 67 percent year-over-year.
“There’s been some ups and down, it’s been a roller coaster in Toledo,” he said. “If we look at the past year, we’ve seen seven of past 12 months had increasing foreclosure activity year-over-year. But we are seeing it in other markets.”
RealtyTrac’s data seems to show that the rise in foreclosures following a steady decline is due to “a backlog of foreclosures that were just never dealt with,” Mr. Blomquist said.
“We don’t believe these are new loans going bad. We think these are old loans just finally coming to the forefront.”
In a recent analysis, RealtyTrac discovered that 75 percent of home loans in foreclosure originated between 2004 and 2008. For whatever reason, lenders have not gotten around to addressing these bad loans until now, Mr. Blomquist said.
“There’s still some stuff under the rug that needs to be swept out and it appears that is what’s happening,” he said.
In Ohio, 65 percent of all home loans in foreclosure originated between 2004 and 2008, RealtyTrac data showed. Only 16 percent of home loans in Ohio in the foreclosure process originated after 2009.
Mr. Blomquist said that while the rise in foreclosure activity in the Toledo area will not be a one-month or two-month aberration, “Overall, I think it’s a relatively short-term trend because the housing market is not crumbling or falling into distress.”
Unfortunately, the rising foreclosures will make the area look bad for a while. The rising foreclosure rate in February pushed metro Toledo up to No. 17 among the 212 metro areas nationwide on RealtyTrac’s list of the areas with the highest foreclosure activity.