| The Repository
The expressions on the faces of four people taking part in an online foreclosure class were tense and serious.
Nobody in the group of Stark and Summit county residents had planned on being in Thursday’s Zoom-based class but circumstances dictated otherwise.
“I just want to stay in my home,” one of the participants said, the man repeating the mantra throughout the session in which Community Legal Aid staff guided homeowners through the stages of foreclosure while offering tips on how to navigate the process and avoid pitfalls.
Homeowners were warned of scam artists who take advantage of people during vulnerable financial times.
The group already had existing foreclosure cases, some resulting from unpaid property taxes. One of the four cases predates the pandemic.
But a potential “landslide” of new foreclosure filings is anticipated in Stark County Common Pleas Court after proceedings resume in existing cases on Oct. 5, said Dwaine Hemphill, court administrator.
Also resuming Oct. 5 are sheriff’s sales — the final step of the foreclosure process.
John Petit, an attorney with Community Legal Aid, said the agency has been fielding more questions about the foreclosure process.
“I see there’s activity happening in that … realm because we get more people showing up and more people calling us inquiring about what their legal options are,” he said last week.
Since late-March, all foreclosure cases have been frozen, meaning no hearings could take place, no motions could be filed and no judgments could be issued.
New filings have slowed to a trickle during the COVID-19 pandemic, Hemphill said.
Foreclosure filings had decreased from 3,017 in 2008 — during the Great Recession and housing market collapse — to 1,466 in 2013; 1,165 in 2016; 965 in 2018; and 1,016 in 2019 before plunging to 273 filings in the first eight months of this year, the dip clearly impacted by the local moratorium.
Judge Taryn Heath is among those who will handle the cases. She isn’t sure how large of a spike the court will experience.
“I don’t think we have that crystal ball to project just what we may be looking at here,” Heath said. “I certainly hope we don’t have the onslaught that is anticipated, and that hopefully, lenders are understanding in this climate of loss and unemployment.”
Another factor is the Federal Housing Administration’s extension of its foreclosure moratorium through the end of 2020 for homeowners with FHA-insured single-family mortgages covered under the federal Coronavirus Aid, Relief and Economic Security (CARES) Act.
However, most foreclosure cases in Stark County involve privately-financed homes, Hemphill noted.
The 2008 recession spurred the creation of the foreclosure mediation program in Stark County Common Pleas Court. The program was among the first of its kind in the state, Heath said.
All homes can’t be saved, she said.
“We don’t want to sugarcoat or mislead anybody,” Heath said. “Some cases are simply beyond reconciliation, and mediation is just like mediation of our other civil cases.
“Both parties have to agree to the resolution, and if you have a mortgage lender who just digs in and isn’t interested, they’re well within their rights to refuse.”
In 2018, a total of 221 foreclosure cases were referred by judges to the mediation program, out of the 965 total filings that year, according to records provided by Hemphill.
Most of those 221 cases were standard foreclosures tied to loan and mortgage payments; 18 stemmed from delinquent property taxes.
Similar numbers were reported in 2019.
Despite the success of the mediation program, demand dropped prior to the pandemic, Heath said.
In 2018, the program’s budget was $46,300 before falling to $27,360 this year, reflecting the reduced caseload, the judge said. Court user fees support the program.
More funding and resources can be added if necessary, and COVID-19 may amplify the need, Heath said.
On Oct. 5, Heath will reactivate 45 pending foreclosure cases — she expects the other four common pleas judges to have similar numbers. A total of 71 cases are pending in mediation, Hemphill said.
Among those contracted to assist with mediation is Community Legal Aid, which serves Stark, Summit, Portage, Medina, Trumbull, Mahoning, Columbiana and Wayne counties.
Petit, managing attorney for Community Legal Aid’s housing and consumer programs, said the agency has been largely focused on evictions.
“Foreclosures are certainly troubling and concerning (but) just numbers-wise, they really do pale compared to evictions,” he said.
The Homeowners Information Class — required as part of the mediation program and also open to the public — began online for Stark County residents last week.
The free sessions are 5 to 6:30 p.m. on Thursdays on Oct. 8 and 22; Nov. 5 and 19; and Dec. 3 and 17. For more information, visit: https://buff.ly/2Zuh8Uq
Topics include loan modification programs, strategies for keeping your home, bankruptcy, the rights of homeowners and related subjects.
Eviction cases in municipal court are typically fast-moving, Petit said. Foreclosures, however, can take months or years, he said.
“I think it’s a point that often gets overlooked,” he said. “The procedural safeguards in a foreclosure case are immensely different than in an eviction (and are) much more advantageous for the homeowner (and) the person who could potentially be displaced.”
“It’s something the community should be proud of,” Petit said of the court’s foreclosure mediation program. “I wish we had similar mediation programs for things like eviction … but it’s not an end-all, be-all for everyone … but it does percentage-wise keep people in their home at a much higher level than if they were simply in litigation.”
“If you simply don’t have the income to be able to afford the home, again payments can be reduced, but generally not eliminated, so there has to be the ability to make a reasonable house payment,” he said.
Edwin Breyfogle serves as the court’s foreclosure mediator.
The process requires the cooperation of homeowners, including 50 pages or more of federally-required financial documentation, including bank statements, tax returns and pay stubs.
Asked to forecast the volume of new foreclosure filings, Breyfogle said he has “no way of predicting how eager the banks will be to modify the loans.”
But with loan default rates increasing and high unemployment, “at some point, the dam is going to break (resulting in more foreclosure cases),” the Stark County attorney added.
Options for homeowners include seeking housing counseling and foreclosure guidance from a U.S. Department of Housing and Urban Development (HUD) counselor for free or at a low cost, Petit said.
For more information, visit: https://www.hud.gov/i_want_to/talk_to_a_housing_counselor
Foreclosure cases don’t typically make it to trial or inside a courtroom, said Heath, who was instrumental in launching the mediation program. Filings, motions, rulings and other paperwork dominate, Heath explained.
“By not seeing a litigant and actually trying any of these cases as a judge, you want to remember that every litigant … is a real person,” she said. “You don’t want to get lost in the fact that you’re just pushing paper, and every case represents real human beings who are being affected in these decisions.
“A lot of times, people find themselves in the foreclosure process to no real fault of their own,” Heath added.
“It’s a very traumatic event, to lose the place you call home,” Heath said. But “we have to follow the law. We can’t be influenced by sympathy … we have to be impartial but at the same time, we can put programs such as our foreclosure mediation program in effect to make sure the underserved in our community and those who lack the ability to have legal representation get that minimum amount of educational information and the opportunity to save their homes … and it is the right and just thing to do in Stark County.”
Breyfogle sees the human aspect up close during mediation. “There’s a lot of human misery in the whole thing,” he said.
Major C.J. Stantz said 10 properties are listed for the Oct. 5 sheriff’s sale.
He doesn’t anticipate foreclosures reaching 2008 and 2009 levels.
Stantz noted that in-person attendance for sheriff’s sales was low at the Stark County Courthouse even before the pandemic because bids can be submitted remotely online.
“When you talk about the housing bubble (in 2008), I remember when we would do 75 to 80 (sheriff’s sales) a week, so the nine or 10 cases (we have currently), that’s not anything out of the ordinary for us.”
Reach Ed at 330-580-8315 and [email protected]
On Twitter @ebalintREP