Ruth Swope (L) looks at her husband Ronald from the porch of their home in Zanesville, Ohio September 9, 2009. REUTERS/Nick Carey

ZANESVILLE, Ohio - More than a year and a half into America's worst housing crisis since the Great Depression, rising unemployment is pushing ever more homeowners in rural Ohio toward foreclosure.

Foreclosure filings in the Midwestern manufacturing state rose 1.2 percent in 2008, but they rose 4.9 percent in counties of fewer than 50,000 people, according to research institute Policy Matters Ohio.

Ohio -- a bellwether state that tends to pick winners in U.S. presidential elections -- had the 7th highest U.S. foreclosure rate in 2008, according to RealtyTrac.

The biggest foreclosure growth Ohio has seen in recent years has been in rural areas, said David Rothstein, a researcher at Policy Matters Ohio. In some ways rural areas are just beginning to catch up with the cities.

Unlike urban areas, where numerous agencies exist to help, finding support in more sparsely populated rural spots is tough for struggling homeowners.

Without jobs or affordable healthcare, many Americans in small towns like Zanesville -- set amid rolling wooded hills and farmland in the southern half of the state -- feel lost. With a population of around 26,000, the town's economy was once based on coal and steel but it now houses many distribution centers for consumer goods in this part of the United States.

In some parts of the state there is simply no one around to help, said Shane Lightle of ESOP, a nonprofit that tries to help Zanesville homeowners like Ronald and Ruth Swope, both 69, avoid foreclosure.

Ronald Swope retired in 2003 after 42 years as an electrician. Suffering from arthritis and gout and unable to afford health insurance, he built up debts of $50,000.

The Swopes tried to refinance their mortgage but, as their home had lost $60,000 in value, their mortgage broker said that was impossible. Seven banks rejected them before they turned to ESOP, which has helped them apply for a loan modification.


I have always paid my own way. I've never asked anyone for anything my whole life, Ronald said. But we had no choice.

The Swopes are a clear cut hardship case and they should qualify for U.S. President Barack Obama's housing rescue plan, said ESOP executive director Mark Seifert.

ESOP and other groups say that in politically conservative rural areas, one challenge is persuading people to ask for help because they attach stigma and shame with doing so.

Foreclosures in America's cities have often been caused by a combination of loose lending practices and a willingness by borrowers to use their homes as cash machines.

In rural areas the problem is more one of job loss or, for the Swopes and other retirees, soaring medical costs.

In urban areas the housing crisis was caused more by poor lending practices, said Ohio Attorney General Richard Cordray. But in rural areas the crisis is related to the economy.

Ohio counties with the fastest growing foreclosure rates in 2008 were either in the industrial northwest -- as falling U.S. car sales forced auto plant and supplier closures -- or the rural, hilly south, according to Policy Matters Ohio.

The problems of the manufacturing sector aren't confined to urban areas, said Cynthia Flaherty, director of home ownership at the Ohio Housing Finance Agency. On the outskirts of many small Ohio towns you'll find an auto supplier or manufacturer. Many have let people go or shut down.


Unemployment in Ohio in July was 11.2 percent, compared to a national rate of 9.4 percent. The rate in Muskingum County where Zanesville is located was 12.7 percent.

Driving through Zanesville, where churches dominate the town center, Shane Lightle passed a store with a hand-painted sign saying We now accept food stamps -- a government benefits program that helps low-income people buy food.

We're seeing more and more signs like that now, he said.

In the neighborhood where he lives, Lightle - a tall, affable, former military man with a crew cut --- pointed to eight foreclosed properties within a couple of blocks.

He estimated that more than 80 percent of home sales in the county are foreclosure-related. A long-standing Midwestern work ethic and disdain for government welfare programs means those facing foreclosure are reluctant to come forward.

It's not easy to get people in a conservative, religious area like this to accept help, Lightle said.

About 100 miles southwest of Zanesville, Highland County has seen thousands of layoffs carried out by package delivery company DHL Express and auto suppliers Weastec and Johnson Controls.

When DHL shut its U.S. domestic operations early this year, about 2,800 people in Highland County -- population 42,000 -- lost their jobs.

Katy Farber, head of the county's chamber of commerce, said a record number of county residents paid their 2009 property taxes in full in January, many likely using severance pay.

Brittany Oglesby, a former worker at DHL's facility in nearby Wilmington, found work after nine months of unemployment. She used retirement savings to pay her mortgage and feed her children, adding she felt ashamed to speak out.

I was afraid to say anything because everyone around here knows everybody's business, she said. But I later found out people understand because so many of us are in the same boat.