OTTUMWA — Despite what is happening nationally, there is no epidemic of foreclosures in Ottumwa.

While there has been a larger than average number of homeowners nationally not able to keep their homes, they are mostly in a few specific categories, said Les Thostenson, a member of the Ottumwa Board of Realtors and the broker/owner for Coldwell Banker.

“Many lenders relaxed their standards in the past few years. All you had to do was turn on the television,” he said.

There was a glut of ads over the past five years for lenders offering to give home loans to people who didn’t have good credit; the interest rate wouldn’t be quite as good, but at least they could get a loan.

That was the good news and bad news that helps explain most of the recent spate of foreclosures, Thostenson explained. These were riskier loans.

“People who normally couldn’t have gotten a loan otherwise were able to purchase their own home,” he said. “But nationally, the foreclosure rate on those loans is 15, 16 percent.”

Yes, that number is high, but Thostenson said he always remembers that 85 percent of homeowners who took those “sub-prime” loans aren't in foreclosure, people who otherwise couldn’t have bought a house.

That’s good to see, he said.

As for refinancing, Thostenson said financial advisors warned about the practice for good reason. People were tempted by companies on television and the Internet offering a chance to fold a large credit card debt, for example, into their mortgage.

“People refinanced their home loans to pay off their credit cards. The problem was now, if you can’t make your payments, you lose your house,” Thostenson said.

In Ottumwa, numbers in general look pretty good, he said.

“In the last 12 months, Ottumwa Multiple Listing Services closed on 429 units. About 34 were probably foreclosures, about 8 percent,” he said. “Twenty-eight out of the 34 were under $50,000.”

The average home price in Ottumwa is $86,000. Many of the homes he has seen foreclosed on over the past 12 months didn’t have families being kicked out by the bank, but instead saw owners just walk away.

He doesn’t want to diminish the difficulties faced by families that actually lost their homes, he said. But when someone was offered a loan with a “minimal” down payment and paid a mortgage lower than rent would have been, some developed a “disposable mentality” and just moved out without selling the home or making further payments.

Of the 8 percent foreclosed on, most were done by out-of-state lending companies. Thostenson said local banks did very little foreclosing on area residences.