Cuyahoga County sees 32% fewer sheriff's auctions of foreclosed homes

Cuyahoga County is unloading fewer foreclosed homes at sheriff's auctions, but officials warn that the trend does not signal an imminent recovery from a mortgage crisis that continues to plague the region.

The county recorded 6,548 sheriff's sales in 2008, down about 32 percent from 2007.

County Treasurer Jim Rokakis said his foreclosure-prevention program, which in three years has spent or steered more than $2 million to help struggling borrowers, deserves some credit. The decline in auctions might also reflect a change in strategy by lenders.

Sheriff's sales had been big business, especially in Cleveland, one of the cities hit hardest by the nation's foreclosure epidemic.

Disproportionate numbers of high-interest, subprime loans resulted in lenders foreclosing on thousands of homes. The lenders often tried to recover some of their failed investments by reacquiring property through sheriff's sales, then selling it on the open market.

But with the mortgage and real estate markets still in tatters, some observers see that cycle slowing.

"Banks don't want the property," said Cleveland Housing Court Judge Ray Pianka. "They walk away because they don't want the burden of home ownership, and part of that burden would be to maintain the property."

In Northeast Ohio, the trend seems limited to Cuyahoga County. Other counties, including Ashtabula, Lake, Lorain and Summit, report steady increases in sheriff's sales. Lorain County, for example, recorded 2,158 sheriff's sales in 2008, compared with 1,992 the year before.

"I'm sure it's a combination of everything -- from the economy, loans and everything else," said Lt. William Davis, who heads the Lorain County sheriff's civil division.

Summit County had 2,919 sheriff's sales in 2008 -- a year-over-year increase of more than 500. In Lake County, sales jumped from 881 in 2006 to 1,342 last year.

"We've been averaging 20 to 30 a week," said Sheryl DePledge, Lake County's support-services administrator. "Hopefully we will see it go down this year."

Officials in Cuyahoga County note the particularly rough toll foreclosures have had on Cleveland, where neighborhoods like Slavic Village are littered with boarded-up homes.

"I think the situation here is more desperate," Rokakis said.

Cleveland City Councilman Tony Brancatelli, whose ward includes Slavic Village, said lenders that have done business in the city are "taking such big hits, they are not proceeding" with sheriff's sales. Neglected properties are often left behind.

"Homes are just sitting in limbo," Brancatelli said.

Brancatelli and Rokakis believe increased pressure from Pianka and from Mayor Frank Jackson's Building and Housing Department could be fueling the problem inadvertently. They say stiffer penalties for code violations scare away lenders, many of them from out of state.

Pianka, who closely monitors the market, said he also is seeing an upswing in personal bankruptcies, forcing banks to withdraw properties from the auction block.

"People file bankruptcy, some in the interest of saving their home, some to get out of the burden of paying their mortgage," Pianka said. He noted a recent case in his court in which both the lender and the borrower were mired in bankruptcy -- a sign of the times.

Even so, Mark Wiseman, director of the county's foreclosure-rescue effort, sees progress. The program funds agencies that provide counseling services for borrowers. Since being launched in 2006, it has kept more than 3,000 from falling into foreclosure, Wiseman said.

"I know we've had a giant effect," Wiseman said. "I know we've saved a lot of people."

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