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Long seen as having devastated Sun Belt cities, the subprime mortgage crisis unleashed turmoil on Ohio and other rural areas. Now federal officials are pledging regulatory attention and financial help.

Subprime loans were distributed in the rural U.S. at even higher rates on average than in metropolitan counties. Much of it was concentrated in Appalachia and other areas stretching from Ohio, West Virginia and Kentucky to Mississippi, Louisiana, Texas and the Great Plains, according to government data provided to The Associated Press by researchers at the U.S. Department of Agriculture and Middlebury College.

It’s a shift from conventional wisdom that larger metro areas were the hardest hit, due in part to gaps in federal mortgage data. But new research is helping shed light on many long-neglected rural counties with high rates of risky lending, coming as U.S. banks pledge relief to hard-hit communities as part of multibillion-dollar legal settlements for their role in selling shoddy mortgage bonds. Lawmakers want rural counties to get their fair share.

“Too many rural communities have been left behind,” said Sen. Sherrod Brown, an Ohio Democrat.

At the peak of the housing bubble in 2006, about 35 percent of home loans across all rural counties were given to borrowers deemed a higher credit risk, whose loans typically come with higher interest rates and fees. In metropolitan counties, the figure was 29 percent.

The rural Ohio counties of Muskingum and Hardin ranked among the nation’s highest in subprime lending, with more than 40 percent of the loans high cost. More than a dozen of Ohio’s other counties had subprime lending rates of 30 percent or greater. Las Vegas’ Clark County, a poster child for the subprime mortgage crisis, had a 23 percent subprime lending rate. Another, Orange County, Florida, had 26 percent.

The numbers reinforce what private groups have long said: The Buckeye State was tops in the share of home loans in foreclosure.

With a cultural emphasis on open space and owning a home, many rural residents jumped to get subprime loans at initial affordable terms during the mid-2000s, only to have fortunes disappear as housing boom turned to bust.

In rural U.S. counties, that has led to higher vacancy rates, population declines and a weak rebound in housing prices.

In rural Rushsylvania, Ohio, Larry McKirahan, 52, expressed frustration with his subprime loan.

McKirahan and his wife took out loans beginning in 1999 to help pay for a four-bedroom, 4,100-square-foot home before refinancing in 2005. McKirahan says he was later surprised by the monthly payments. After losing his factory job in 2008, McKirahan filed for bankruptcy reorganization in 2010, which temporarily stopped foreclosure.

“We’re at the mercy of the system,” says McKirahan, describing lenders unresponsive in explaining the loan terms. Now a truck driver, McKirahan worries he may owe a hefty sum on more than $200,000 in loans. “This is our home, we built it and raised our family in it, but we don’t know how much longer we’ll be able to stay.”

The Consumer Financial Protection Bureau, the federal entity that keeps watch against bad lending, recently expressed concern with high numbers of rural borrowers who take out high-cost loans, especially for manufactured homes.

Subprime lending is showing signs of a return. Paul Nikodem, head strategist at Nomura Securities International, said there is slow but growing supply for less traditional loans aimed at customers who may not qualify under the government’s newly tightened borrower rules. Recent federal mortgage data analyzed by the nonprofit group Housing Assistance Council suggest that higher rates of rural subprime lending persist.

“The bureau is continuing to carefully monitor all aspects of the mortgage market, including rural areas,” said Samuel Gilford, a CFPB spokesman.

Brown and Sen. Rob Portman, an Ohio Republican, have been urging Bank of America and J.P. Morgan Chase to devote some of their multibillion-dollar settlements with the Justice Department to revitalize blighted Ohio neighborhoods. The two banks are distributing U.S. aid totaling more than $10 billion for consumer and community relief.

“Very often we act like this is only a problem in big cities. It isn’t,” said Zach Schiller, research director of the nonprofit group Policy Matters Ohio, responding to the federal analysis being published in the journal Housing and Society. “It spread far and wide to smaller communities, and it wasn’t limited at all to just the Clevelands and Cincinnatis.”

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