ASBURY DRIVE is a working-class neighborhood in Toledo with a park and an elementary school nearby.
Nicole Hamblin thought it was an ideal area to raise a family. She bought a small two-story brick home for $77,000 in 2005.
In the past year and a half, the house across the street was repossessed, the house next to hers has been repossessed, and 14 homes valued $57,000 to $93,000 have been repossessed on three blocks of Asbury.
"This was the perfect neighborhood," Ms. Hamblin said. "There were a lot of kids, a school just three blocks away, nice homes."
Her plans to sell her house anytime soon have been put on hold, another casualty of the foreclosure surge nationally.
In her ZIP code, 43612, this year, 245 houses - or one in every 53 in the zone - have been repossessed.
That ZIP code is one of five in the Toledo area with more than 200 repossessions and the most foreclosure-related actions for January through October this year in northwest Ohio and southeast Michigan, according to RealtyTrac Inc., an online tracking agency.
East Toledo, in the 43605 ZIP code, has the area's worst record. For every 40 houses, one has been repossessed by the lender.
One area in Toledo, ZIP code 43608, had one repossession for every 26 houses.
The ZIP code analysis, the first such neighborhood look prepared for The Blade, found job and work-hour cuts, divorces, medical problems, predatory lending, and homeowner misunderstandings of what's involved with loans.
"From what we have seen when we review our foreclosures is, No. 1, it's a job issue," said Ralph Vinceguerra, president of mortgage broker Northern Ohio Investment Co., in Sylvania.
"Maybe somebody loses a $16-an-hour job and replaces it with a $12-an-hour job. That's the difference between keeping your house and not."
Keith Foster, director of enforcement and compliance at the Fair Housing Center in Toledo, said many factors contribute to the home loan problems.
"What have these area got in common?" he said. "Well, they've probably got higher areas of concentration where people got laid off over the last two years."
He added: "Personally, I just think that the lending controls got so out of hand. There were so many brokers popping up and they get their check at closing and they were done."
Elsewhere in metro Toledo, foreclosure filings jumped in the suburbs and in many outlying areas. Generally, though, the filing numbers are relatively small.
A main Lima ZIP code, 45804, had a 567 percent jump in repossessions for the first 10 months this year compared to the same period last year, and Wauseon's 43567 area had a 220 percent boost, RealtyTrac found.
But repossessions dropped for the period by 85 percent in Sandusky's 44870, by 33 percent in Port Clinton's 43452, and by 24 percent in Temperance's 48182.
Real estate agent Doug Vandergrift, of the Vandergrift Co. in Lambertville, said foreclosures in Monroe County have leveled off because homeowners have become educated about the process and found that working with a lender or selling their houses are better alternatives to a sheriff's sale.
"Some were just dropping off the keys at the lender and thinking they could just walk away from the house," he said. "But they've found that it doesn't end there. Foreclosure follows you wherever you go."
National figures each month all year show Michigan and Ohio as among the worst states in foreclosures. Filings that include default notices, auction notices, and repossessions totaled all year show Michigan and Ohio as among the worst states in foreclosures.
Filings that include default notices, auction notices, and repossessions totaled 201,950 in November, up 68 percent from a year earlier.
Much of the problem has been pegged to a weakened national economy, job losses, and poor lending practices that included loans to people with poor credit and to adjustable-rate loans that had low initial payments but climbed to levels unmanageable by the borrower.
In Lucas County, the problem has become severe. Not only are foreclosure-related filings high, but also 30 to 50 percent of all such filings are bank repossessions.
In the 43605 ZIP code, 293 repossessions occurred in the first 10 months this year, up from 115 for the period a year earlier and amounting to 44 percent of total foreclosure-related filings, RealtyTrac found.
Chris Hall, manager of the Danberry Co.'s office that covers East Toledo, and other local experts said rapid housing value growth contributed to the problem, especially when the increases in values did not seem to be based on improvements in the houses.
Mr. Hall said his firm has a recent listing from an East Toledo couple whose home was appraised at about $30,000.
But Lucas County tax records show it appraised at $42,000, and a few years ago the couple were able to refinance the home at an appraised value of $70,000.
"The lender gave them twice what it's worth. It's a mess," he said.
"They're an elderly couple on Social Security and now they want to sell and they don't know what to do. The mortgage far exceeds the value of the house."
The push by the government to encourage home ownership may have backfired, experts said.
Easily available credit for people with questionable credit history caused areas like East Toledo to become seller's markets even though the housing quality hadn't improved, experts said.
In 1995, Mr. Hall said, he bought a small house in East Toledo for $25,000 as an investment. He fixed it up, added a garage, and sold it in 1998 for $48,900. In 2001, the owner sold the house, with no added improvements, for $63,300, a 153 percent increase.
The Lucas County Auditor's office said housing values in East Toledo rose sharply in the late 1990s.
Its records show that the median sale price in 1997 was $26,000, but it jumped 12 percent the next year, 10 percent the year after, and 9 percent in 2000.
It was unchanged in 2001, went up 4 percent in 2002 and 3 percent in 2003, and crested at $37,500 in 2004. This year, the median price has dropped 21 percent to $30,000.
Countywide, the average home sales price through November was $119,685 on 645 fewer sales than a year ago, when the average was $127,111, Toledo Board of Realtors records show.
Pat Rosencrantz, manager of DiSalle Real Estate Co.'s Oregon/East Toledo office, said the home-value increases on the east side of the Maumee River nurtured the problem.
"Money was so easy to come by, and the lenders were lending to first-time buyers with zero percent down, and oftentimes the prices on the homes were on the high end," she said.
She recalled a tour of houses in East Toledo six years ago when she was told values were appreciating at over 100 percent.
At one home the seller wanted $90,000, and she remembered thinking, "Buddy, you're out of touch."
Besides East Toledo, other city ZIP codes hard hit by foreclosures this year were 43607, which is west from Ewing Street to Reynolds Road to south of Bancroft Street to the Toledo railroad yards; 43608, which is east of Cherry Street to just past I-280 and south of I-75 to the Greenbelt Parkway; 43609, east from Byrne Road to the Maumee River and from Arlington Avenue to south of the railroad lines; and 43612, west and north of I-75 to Jackman Road to the Michigan border.
Of note, even suburbs such as Sylvania and Sylvania Township, in the 43560 ZIP code, had big increases, but the 76 repossessions and 190 total filings paled compared to the worst Toledo neighborhoods.
Mr. Vinceguerra, of Northern Ohio Investment, said predatory lending gets much of the blame for the current woes locally and nationally, but it is only a factor. Such lending provides high-cost loans generally to people with poorer credit, sometimes with no down payment.
"The prime lenders are having difficulty with foreclosure too," he said. "You can't blame it all on predatory lending. That accounts for only a small percentage of what's actually occurred."
Mr. Foster, of the Fair Housing Center, said many buyers may not have been well educated about buying a home or realistic about what they could afford.
"A lot of people just wanted a 'Yes' and many weren't sophisticated enough to understand what they were signing," he said.
Rod Culler, a foreclosure specialist at Welles Bowen Realtors, said, "A lot of buyers went in with the notion they could buy without any money down. They budgeted their loans based on their payments and now we see a lot of loans being reset at higher rates and they did not budget for those factors."
Still others got adjustable mortgages thinking that home values would keep rising and that they could refinance to lower interest rates in two or three years.
They never thought housing values would fall and they'd be unable to refinance as the home's value fell below its purchase price, Mr. Culler said.
Some lenders provided loans for more than the value of the house, which gave the borrowers cash to spend - that would later need to be repaid, with interest attached.
Ms. Hamblin, the homeowner on Asbury Drive, said of the troubled houses on her street, "At the house next door, nothing is getting done. And the one across the street, the back yard looks like a jungle and it's very visible. It's all a definite concern.
"We only wanted to stay here one or two years at the most and then sell and hopefully move into bigger and better things. Now I guess we'll be keeping all that on hold."
Eunice Glover, a foreclosure counselor at the Northwest Ohio Development Agency, has worked with numerous buyers who lost their houses. It is clear to her that many got credit too easily.
"When you do go to buy that home and you get to closing and see that the terms are different than what you were told, you can always get up and walk away from the table," she said. "But some people didn't understand that. They went ahead and signed anyway."
Welles-Bowen Realtor Mary Ann Coleman, an East Toledo native who has sold property there for 20 years, said she had many clients in the 1990s who seemed unaware they would have to pay insurance and taxes on a home.
"It was a shock to them," she said.
Contact Jon Chavez at:
jchavez@theblade.com
or 419-724-6128.
First Published December 23, 2007, 11:33 a.m.
