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More than 3,000 property tax liens in Toledo and in other areas of Lucas County which were sold by the county to private companies are expected to put more homes into repo house listings.

According to housing advocates, while local governments charge low interests and fees, private companies charge high interests and service fees. These later accumulate to thousands of dollars that distressed homeowners could not pay, ultimately forcing them into foreclosure.

Anita Lopez, auditor of Lucas County, said the county gained a cash windfall of $14.7 million by selling off over 3,000 tax liens to private companies. The money is a much needed gain as the city is struggling to find money to finance public services and schools. But in the long run, according to Lopez, the cost of large numbers of foreclosure properties will wipe out the short term gains of selling tax liens.

In contrast, investors insist that the sale of tax liens to private investors benefit all parties. They say that many struggling counties and cities across the country have been selling tax liens to the highest bidders to raise much needed cash for community services, such as fire departments, school districts and public parks.

They also explain that investors take on risky investments, but admittedly, these liens could turn very profitable for them. They pay local governments upfront for the tax liens and acquire the rights to foreclose on the tax delinquent properties and to impose high interest rates. They also take priority over banks that provided the home loans.

According to Howard Liggett, head of the National Tax Lien Association, profits from tax liens beat those earned from certificates of deposits. Liggett reported that tax lien investors earn approximately $10 billion each year.

Lucas County started selling its tax liens in 2006 to New Jersey-based Plymouth Park Tax Services, which is owned by JPMorgan Chase and which also uses the name Xspand.

Plymouth, which was once run by former New Jersey governor James Florio, ended with JPMorgan when it acquired Bear Stearns which earlier bought Plymouth.

Now, Plymouth is one of the biggest companies in tax lien investments. According to Plymouth officials, they have filed over 1,000 foreclosure cases against delinquent taxpayers, but have foreclosed on only 56 of them.

But housing advocates insist more foreclosures will arise from the tax liens, as tax debts amounting to $3,300 have quickly grown to $6,800 when the tax liens were sold.

The Ohio city of Huber Heights has decided to work with Dublin-based real estate developer DEC Investment Group for the development of a massive residential project called Carriage Trails on 625 acres of land in the city.

According to city officials, despite the relatively big number of repo homes in the city and its nearby areas, the number of residential building permits issued by the city has declined so there is room for additional home projects. Besides, the housing project has been in the planning stage for over 8 years and has changed ownership several times.

In July, Huber Heights is second to Dayton in the number of new foreclosures. Statewide, more than 11,000 households received foreclosure filings and 760 foreclosed homes were sold, according to a nationwide survey of foreclosure cases filed.

According to Roger Custer, director of planning and development at Huber Heights, DEC Investment has already spent over $10 million for the project and will start working on its first model house within a month. Another $7 million has been allotted for road construction within the project.

Ken Conaway, a top executive of DEC Investment, said that the first phase of the project would comprise 37 lots and that the first 6 homes would be built before the year ends. He added that construction activity will step up in 2010.

The development project was first proposed in 2001 as a golf-course-centered development after Huber Heights annexed farmland in the Bethel Township of Miami County. It was planned as a $350-million ten-year joint venture project by The Kendall Group, Hurdzan-Fry and TLG Development, but the plan never got off the ground.

In 2005, Kendall Group lost the property to foreclosure when it was unable to pay the loan owed to Fifth Third Bank and after it failed to pursue a deal with Hills Communities to acquire and continue the project.

In 2007, DEC Investment acquired the property from Fifth Third Bank for $5.1 million and started making development plans. Conaway said Huber Heights has strong growth potential as a city and DEC wants to help jump-start and at the same time take advantage of opportunities in the area.

According to Conaway, 1,650 homes can be built in Carriage Trails, with single family distressed homes built on the west side and multi family distressed homes built on the east side. Lots on the center of the development would cost between $275,000 and $400,000, while lower-cost homes would be priced around $130,000.

The case of a retired Ohio professor unable to sell his house after over two years of competing with foreclosure listings indicates how low the Ohio housing market has gone down because of continued Ohio foreclosures.

Based on a report by the Ohio Association of Realtors, home sales in January in Ohio has gone down by 21.3 percent to 3,527 units from total sales of 4,482 units in January 2008. Because of thousands of homes in foreclosure listings, the average home sale price for January has gone down to $115,326, a decrease of 11.9 percent from the average sale price in January 2008.

Similarly, the housing market in Mansfield has been battered by foreclosure listings, with only 72 units sold in January. This represented an 8.9 percent drop from total sales in January 2008. The average sale price was $66,765, a drastic 21.5 percent fall from the average price in January 2008.

Ralph Hunt, the professor who has retired from full-time teaching at the Ohio State University in Mansfield, has been selling his Tudor-style two-story home for around $170,000. He bought the house seven years ago for about $129,000.

Thinking that he can sell immediately his Mansfield house, he bought a new house near Akron where he planned to retire. But the lack of people moving to Mansfield has frustrated his plan. Most prospective buyers living around Mansfield can not proceed with their house purchase plans because they could not sell their own houses.

Like what housing analysts have been witnessing across the country, the professor and the prospective buyers have been caught in the swirl of rapidly growing foreclosure listings. Don Mitchell, director of Mansfield-Richland County Fair Housing, said foreclosure listings have not only pushed down home prices, they also have left homes and yards in disrepair, further pushing down home prices.

Since Hunt was unable to sell his Mansfield house after he bought a new house, he has had to struggle month after month to pay two monthly amortizations. This week, after more than two years of waiting and competing with foreclosure listings, his agent told him he has found a buyer. But Hunt may have to throw out any thought of gains from the house he maintained for more than seven years. His agent says the buyer is willing to shell out only around $125,000 for his house, more than $40,000 below his original listing price.

The housing bill passed by President Bush is viewed in different light by different sets of people. Critics say that with the number of loans that were passed by either negligent or greedy lenders in the past, the reversal of the foreclosure crisis will need more than what the bill has to offer. Supporters of the bill though view it as a blessing, considering the disbursement of funds and new programs that the bill encompasses. With the bill in place, Ohio foreclosure listings could very well see a decrease.