Over 14 percent of Ohio homes purchased with loans were in default or had already become distressed foreclosed houses for sale in the second quarter of this year, according to a bank survey conducted by the Mortgage Bankers Association.

In the first quarter, 13 percent of homeowners in the state with home loans were in default or in foreclosure.

Across Ohio, almost 9.8 percent of mortgage borrowers were in default by 30 days or more but not yet in foreclosure in the second quarter. Approximately 4.5 percent of homeowners with home loans were in the process of foreclosure.

Nevertheless, Ohio is not among states with the worst default rates. Florida is still the highest in default rate, with nearly 23 percent of all its mortgages in default by at least a month or in foreclosure. California, Nevada and Arizona are the other states following Florida’s default rates.

In a nationwide survey of foreclosures in the second quarter of 2009, Ohio ranked 12th in foreclosure rate, with 1.16 percent of all households receiving a default or foreclosure filing.

Jay Brinkmann, the lead economist of MBA, said that the mortgage problem will continue to worsen until 2010 and 2011.

He predicted that unemployment and home loan defaults will reach their highest levels midway in 2010 and that foreclosures will reach their peak about 6 months later.

Brinkmann further explained that there will be no significant reductions in default and foreclosure rates until the unemployment problem is solved. He also cited the situation of homeowners in many areas where home values have gone down far below their loan amounts.

Across the U.S., over 13 percent of households with home loans were in default by at least a month or in foreclosure in the second quarter. With a 14-percent rate, Ohio is in a worst state of delinquency.

According to housing analysts, the high default rates arose from rising unemployment rates and increasing defaults in the home loan category previously thought as safe from delinquency and foreclosure.

In 2008 and in the first months of 2009, only borrowers who took out subprime and other risky home loans were defaulting and going into foreclosure. But now, borrowers who had strong credit, had higher incomes and who took out prime loans with proper documentation are the ones missing their monthly payments because of reductions in income and loss of jobs.