BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After...

BEA 4th Quarter GDP 1st Estimate 0.7% Q&A: Why Did GDPNow Rise After Durable Goods? When are Construction Revisions Coming? COLUMBUS, Ohio - An increasing number of Ohioans who live in small towns and rural areas are losing their homes because of risky, high-interest mortgage loans, records show. Sub-prime loans, which generally carry interest rates above 8 percent, are designed for people who can't qualify for traditional mortgages because of poor credit, low income or the lack of a down payment. Mortgage brokers, who for years have marketed high-interest loans in poor city neighborhoods, have expanded their reach into the state's farmlands and Appalachian hills, The Columbus Dispatch reported for a story Sunday. That has contributed to Ohio's high foreclosure rate, the worst in the nation. About 10 percent of sub-prime borrowers were in foreclosure between July and September, triple the national figure, according to data from the Mortgage Bankers Association. The state's biggest concentration of costly loans was in Hardin County in rural north-central Ohio. About 32 percent of mortgages there carried a high interest rate in 2004, a time when interest rates on a conventional loan averaged just 5 percent. Sub-prime loans can provide a financial lifeline for people who otherwise couldn't buy or refinance a home, but they are also more expensive. When Sammy and Tracy Bogue of Kenton, 56 miles northwest of Columbus, signed for a 7.5 percent adjustable rate loan, they understood that the rate could go up. In fact, the fine print shows that it will never go lower and could climb as high as 14.5 percent. More than 59,000 foreclosure notices were filed in Ohio in 2004. In the first half of 2005, 3.3 percent of state home loans were in foreclosure, more than triple the national average, according to the Mortgage Bankers Association. Hardin County registered the eighth-highest jump in foreclosures in Ohio from 1999 to 2004 - a spike of 181 percent. A similar acceleration occurred across much of rural and suburban Ohio, according to state Supreme Court statistics. The bill would remove a provision that exempts mortgage brokers and lenders from a state law prohibiting deceptive sales practices. Doing so would open up brokers and lenders to lawsuits by the attorney general and individual borrowers who think they have been cheated or misled. 'Sub-prime loans can provide a financial lifeline for people who otherwise couldn't buy or refinance a home, but they are also more expensive.' 'Ohio lawmakers are considering a predatory-lending bill called the Ohio Homebuyers' Protection Act. The bill would remove a provision that exempts mortgage brokers and lenders from a state law prohibiting deceptive sales practices.' 'In the first half of 2005, 3.3 percent of state home loans were in foreclosure, more than triple the national average, according to the Mortgage Bankers Association.' The content on this site is provided as general information only and should not be taken as investment advice. All site content, including advertisements, shall not be construed as a recommendation to buy or sell any security or financial instrument, or to participate in any particular trading or investment strategy. The ideas expressed on this site are solely the opinions of the author(s) and do not necessarily represent the opinions of sponsors or firms affiliated with the author(s). The author may or may not have a position in any company or advertiser referenced above. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.