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Ohio needs a moratorium

Judges' rulings stop some foreclosures

Published Jan 3, 2008 11:08 PM

The foreclosure crisis in Ohio has become desperate, with hundreds of homes put up for auction every week in Cleveland’s Cuyahoga County alone. Now some judges’ rulings have given partial relief with a complex decision that has yet to be played out.

Once again Ohio rivals Michigan in rust-belt poverty numbers. Statistics vary as to which state leads the country in foreclosures, but it is one or the other. Cleveland is second only to Detroit when it comes to banks going after workers’ homes.

The Cleveland Plain Dealer reported on Dec. 25 that homeowners are seeing some badly needed relief. This past Oct. 31, Federal District Court Judge Christopher A. Boyko dismissed 14 foreclosure filings. On the Web site iamfacingforeclosure.com, Moe Bedard and Aaron Krowne explained the complex ruling:

“Judge Boyko issued an order requiring the Plaintiffs in a number of pending foreclosure cases to file a copy of the executed Assignment demonstrating Plaintiff (Deutsche Bank) was the holder and owner of the Note and Mortgage as of the date the Complaint was filed, or the court would enter a dismissal.

“The Court’s amended General Order No. 2006-16 requires Plaintiff (Deutsche Bank) to submit an affidavit along with the complaint, which identifies Plaintiff as the original mortgage holder, or as an assignee, trustee or successor-interest.

“Apparently Deutsche Bank submitted several affidavits that claim that Deutsche was in fact the owner of the mortgage note, but none of these affidavits mention assignment or trust or successor interest.

“Thus, the Judge ruled that in every instance, these submissions create a ‘conflict’ and they ‘do not satisfy’ the burden of demonstrating at the time of filing the complaint, that Deutsche Bank was in fact the ‘legal’ note holder.”

According to Jacksonville Area Legal Aid Attorney April Charney:

“This court order is what I have been saying in my cases. This is rampant fraud on every court in America or nonjudicial foreclosure fraud where the securitized trusts are filing foreclosures when they never own/hold the mortgage loan at the commencement of the foreclosure. So with this decision, it appears confirmed that investors in the mortgage debacle may in fact own nothing—not even the bad loans they funded!”

The reason foreclosure filings ended up in federal courts in the first place was that mortgage holders were seeking a legal short cut, bypassing the huge backlog in the Cuyahoga County and other Ohio county court systems. Now some Ohio homeowners are getting a break.

Foreclosures filed in Cleveland federal court were averaging 100 per month before Judge Boyko’s ruling but in December dropped to two. As of Dec. 31, federal judges in Dayton and Columbus have issued decisions concurring with Judge Boyko.

The federal ruling led Hamilton County Common Pleas Court Judge Steven E. Martin to rule Dec. 7 that Wells Fargo Bank could not legally foreclose on the Cincinnati-area home of Gloria and Ellsworth Byrd, because the bank’s lawyers didn’t prove that Wells Fargo was the legal owner of the mortgage before it filed the foreclosure lawsuit.

However, while this is good news for the Byrds and others, these court rulings will only slow down a crisis that has reached disastrous levels.

All but three of Ohio’s 88 counties have seen an increase in foreclosure filings in 2007.

Cuyahoga County has been hit the hardest. Cleveland and the “inner ring” suburbs—where the Black population is concentrated and poverty is staggering—have the most foreclosures, both numerically and per capita, in the county.

Yet the highest increase in the rate of foreclosure filings has been in the higher income “outer” suburbs. The predominantly white suburb of Parma, home to a General Motors plant and many autoworkers, has seen the number of filings double in the past year. Foreclosures are a class-wide problem.

Altogether nearly 90,000 Ohio households are currently at risk of losing their homes. Many are the victims of predatory schemes. In Summit County three lending companies—Carnation Banc, Evergreen Companies and Brittain Holdings—were just indicted, with prosecutors labeling them “financial criminals who overvalue homes, borrow money under false statements and sell securities backed by worthless second mortgages.”

Craig Conner, former president of Carnation Banc, has already pleaded guilty to engaging in a pattern of corrupt activity and 21 other felonies.

The case of Katie Turner of Dayton is typical. In 1997, after her husband’s death, Turner refinanced and saw her adjustable-rate mortgage payment jump from $527 to more than $865 over the next three years. After she made one late payment, her monthly bill increased to more than $1,000.

Turner was able, with the help of an agency, to renegotiate a workable arrangement. Most homeowners will not be so lucky. For many, selling their property is not even an option in the current economic recession. Housing values have fallen throughout the state, which means that even those able to find a buyer for their home may be selling at a price that is less than what they owe, and they could still be in debt after using that money to pay off the mortgage.

The state’s politicians have voiced concern, but none have taken concrete action. U.S. Sen. Sherrod Brown, a first-term Democrat, has suggested that Congress is limited in what it can do and “the president has not used the power of his office.”

Ohio Attorney General Marc Dann has voiced agreement with the judges’ ruling and reportedly will push for dismissal of dozens of cases across the state. Gov. Ted Strickland has said he will propose legislation to stop foreclosures—but when? The crisis demands that the politicians do more than talk about what they intend to do and actually do something.

Judge Boyko’s ruling, with which legal authorities at the county, state, and federal level concur, demonstrates that many of these foreclosures are not only inhumane but downright illegal. Clearly, activists calling for a halt to the threats against their homes have legal leverage.

As in Michigan, where grass-roots groups have begun to fight foreclosures, the Ohio foreclosure epidemic calls for drastic measures to defend workers and their families from the illegal predations of finance capital. Now, not later, is the time for an immediate moratorium on home foreclosures in the Midwest and across the country.