By Ken Alltucker
The Cincinnati Enquirer
and The Associated Press

Even as an improving economy helped more U.S. homeowners make mortgage payments on time this summer, a report released Tuesday ranked Ohio's foreclosure rate as the highest in the nation.

The third quarter survey of the Mortgage Bankers Association showed 2.7 percent of mortgage loans in Ohio were in foreclosure, up from 2.6 percent in the second quarter. That's more than double the national average, 1.1 percent, and slightly above Indiana's 2.6 percent - the nation's second-highest foreclosure rate.

Yet the report also showed some improvement for Ohio. The percentage of homeowners late on mortgage payments dropped to 5.6 percent in July-to-September compared to 5.7 percent in the April-to-June quarter.

The seasonally adjusted percentage of late mortgage payments for all home loans dropped to a three-year low of 4.28 percent in the July-to-September quarter, down from 4.62 percent in the previous quarter. The survey covers roughly 35 million mortgage loans.

Housing counselors in Greater Cincinnati say they've seen more requests from homeowners facing foreclosure. In Ohio, lenders typically don't file a foreclosure case until a homeowner misses several payments.

"We're getting a high number of calls," said Mary Crawford, director of operations for Greater Cincinnati Mortgage Counseling Service. "It's due to a combination of people getting laid off or losing some of their income."

Economists expect the economy slowed to a growth rate of around 4 percent in the current quarter, which would still mark a solid showing.

"With the expectation of continued strong economic growth through the next several quarters, job growth should continue and accelerate. This, in turn, is likely to give support to the downward trend in the delinquency rate, taking foreclosures lower as well," said Doug Duncan, the association's chief economist.