There’s a bit of good news for Lorain County – the number of foreclosures in the county is going down.

Lorain County Clerk of Courts Ron Nabakowski announced this week that foreclosure filings for the first quarter of 2010 were down 9.7 percent from the same period in 2009.

Foreclosures in January were down to 216 from 218. February fell from 206 in 2009 to 168 this year. March saw 238 filings, down from 265 last year.

“Hopefully, this is a sign of things getting better,” Nabakowski said. “The economy is starting to turn around.”

The recent foreclosures, Nabakowski said, are largely tied to people losing their jobs and long-term unemployment.

“If unemployment goes down, we can hopefully reduce foreclosures even more,” he said.

Nabakowski said new government initiatives may also help slow foreclosures. The Home Affordable Foreclosure Alternatives Program (HAFA), an extension of the Home Affordable Modification Program, streamlines the process for deeds-in-lieu and short sales to keep homeowners out of foreclosure.

“This is a very unstable time,” Nabakowski said. “Different banks and financial services companies have different policies, so we’re not sure how things are going to play out.”

From 2005 through 2007, the first ripples of economic trouble were seen in foreclosures in urban areas.

In 2006, foreclosures in Lorain County exploded, increasing 46.5 percent. That, Nabakowski said, was largely the consequence of home refinancing for credit card debt earlier in the decade, as homeowners believed that their property values would just continue to climb.

But when the economy got worse and the real estate bubble burst, the suburban areas in eastern Lorain County, such as Avon Lake, Avon and North Ridgeville, started seeing more foreclosures, Nabakowski said. People weren’t able to refinance those loans and were saddled with monthly payments they could no longer afford.

Now, the foreclosures are countywide as homes in the more rural townships are being seen on the foreclosure rolls.

In some parts of the country, the foreclosure sales are reviving the house-flippers, those who buy homes cheap, do some improvements, and sell for a profit. According to a report in Business Week magazine, the number of foreclosed homes that changed hands within six months of being bought, which is a common sign of a house flip, is on the rise, particularly in the western U.S.

Nabakowski said he doesn’t expect a surge in flipping in Lorain County until the economy is more stable.

“A lot of people got burned when the real estate market went bad,” he said.

While fewer foreclosures is good news, foreclosures are still a major problem. According to the business magazine Forbes, the Cleveland market, which includes Lorain County, is tied with Cincinnati for seventh place in the country among the worst housing markets in the nation. With unemployment still high, homes don’t sell. That makes it harder for people hit by unemployment or underemployment to sell their home in order to avoid foreclosure.

“Until the housing industry recovers, the economy won’t,” Nabakowski said.

Federal Reserve Chairman Ben Bernanke agrees.

“We are far from being out of the woods,” he said Wednesday at a speech in Dallas.

Not everyone is feeling optimistic. HousingWire, a news service for the mortgage industry, has stories reporting Bank of America and JPMorgan Chase, as well as government-sponsored enterprises Fannie Mae and Freddie Mac, are expecting a surge in foreclosures in 2010.

In February, Ohio was eighth-highest in the nation in new foreclosures with 11,286, according to RealtyTrac, a foreclosure market Web site. California was first with 68,562, followed by Florida (54,032), Michigan (20,028), Illinois (17,312), Arizona (16,718), Texas (12,368) and Georgia (12,177). Overall, foreclosures fell by 2 percent nationwide in February from January’s levels but were still 9 percent higher than February 2009.

Contact Melissa Hebert at 329-7129 or mhebert@chroniclet.com.

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