Every situation is different and has to be evaluated but here’s the story.
The homeowner is a couple years into a 30 year no money down mortgage. (Mortgage rule of thumb: first 10 years pays 10% of the mortgage, 15 years pays 25 %) Now the house has lost 20 to 25% of its market value. The owner is underwater. It is going to take 10 years or more of payments for the mortgage to equal the market value. So for the next 10 to 15 years the house payments build no equity and are in effect rent. Question can your rent another house cheaper? With foreclosures in Ohio taking up to 2 years the homeowner will live rent free for 2 years before becoming a renter.The lack of payments during foreclosure can enable saving for a downpayment. The homeowner will need to rehabilitate their credit score after the foreclosure.