The face of home foreclosure is not a pretty one: Rows of neatly kept homes are interspersed with boarded-up, graffiti-marred houses that become magnets for crime. Longtime homeowners struggle to keep up their properties, often unable to sell despite steep drops in their properties’ value.

But that face has become a reality in neighborhoods such as Price Hill, where lenders foreclosed on 427 properties last year – more than one out of every 17 homes in that neighborhood.

That grim statistic is among many detailed by The Enquirer’s Greg Korte in today’s special report, “Foreclosure’s Fallout.”

It is must reading for all those who are involved or are intending to get involved in a home mortgage. It also is must reading for area policymakers looking to stem the tide of foreclosures and neighborhood decline, particularly with the nation’s housing market in a widening crisis.

Among other facts in Korte’s report:

More than 1 million U.S. families lost their homes to foreclosure in 2006, often victimized by too-easy loan approval and lending schemes that led to out-of-reach mortgage payments.

In 2005, so-called “subprime” lenders – offering loans with higher interest rates to less creditworthy borrowers – accounted for a quarter of all the loans made in the Price Hill area.

Many subprime loans, which carry stiff penalties and interest rates that balloon after a couple of years, trap families in a cycle of debt that makes foreclosure all but inevitable.

Some local neighborhoods have been particularly hurt by a scheme called “mortgage flipping,” in which investors buy cheap houses, make quick fixes, inflate their values, then sell them to buyers who soon find themselves in foreclosure – starting the process all over again.

The vast majority of lenders, brokers and others in the business operate ethically and fairly, of course. But the few bad apples can wreak havoc far beyond their small slice of the mortgage pie. “These people are the scum of the earth that do this,” state Rep. Steve Driehaus, D-West Price Hill, told Korte. “They ruin families. They ruin neighborhoods.”

Foreclosure surely hurts the families caught in the home-lending trap, but the damage to other homeowners is considerable, and the effect on entire neighborhoods can be severe – in some cases irreversible.

Korte cites a finding by the Chicago-based Woodstock Institute that each foreclosure within an eighth of a mile can reduce a homeowner’s property value by 1.4 percent. Residents who have kept their financial affairs in order struggle to keep up the value of their own homes. Some even mow lawns of abandoned houses so those properties won’t appear so decrepit.

Still, those empty, blighted dwellings attract crime. Robbers strip the homes of valuable metals. Drug dealers conduct business in them.

Elected officials have just begun to find remedies. Last June, then-Gov. Bob Taft visited the home of a Columbus couple victimized by predatory lenders to sign a bill giving home buyers greater protections from unscrupulous lenders and mortgage brokers.

The law, which took effect Jan. 1, applies Ohio’s consumer protection law to lenders and mortgage brokers, giving the state attorney general power to intervene – a power Attorney General Marc Dann has begun to exercise.

It also forbids certain loan practices, such as failing to consider the borrower’s ability to repay when issuing a loan and influencing an appraiser to falsely inflate a home’s value.

These are good tools, but it is obvious that more is needed. With the nationwide downturn in the housing market, many people caught in the mortgage game – whether subprime or not – may find themselves in a bind.

Statewide, an estimated $14 billion in adjustable rate mortgages (ARMs) will adjust upward in the next five years. Many homeowners will be in for a shock – even those who consider themselves better-educated, savvy consumers in higher-income neighborhoods. The complexity of modern mortgages and the refinancing process can camouflage many surprises.

Advocates working to reduce foreclosures say educating prospective consumers is a key element. Many are coming to realize that such education needs to happen even earlier – in high school, where financial literacy training is sorely lacking in most states.

Financial counseling for families that already find themselves in a mortgage pinch can save them from losing their homes. Locally, a coalition called the Hamilton County Homeowner Preservation Group has been working to reduce foreclosures. Hamilton County Clerk of Courts Greg Hartmann, whose job it is to send out foreclosure notices, now includes information on how homeowners can find financial counseling and other help. On the state level, Driehaus is on Gov. Ted Strickland’s Foreclosure Prevention Task Force, headed by Commerce Director Kimberly Zurz.

Ohio now leads the nation in the rate of home foreclosures. That is not a “leadership” role we want to keep. Foreclosure is a difficult and imposing problem – but it must be addressed. Our neighborhoods’ viability and our cities’ quality of life are at stake.

*These clippings are provided for “fair use” not-for-profit, educational purposes (and other related purposes). If you wish to use this copyrighted material for purposes of your own that go beyond “fair use,” you must obtain permission from the copyright owner. Please contact Woodstock Institute for more information.