Michigan remains one of the highest foreclosure states

By April Lehmbeck
C & G Staff Writer

The rate of foreclosures in the nation is trending down, but Michigan remained among the top 10 states with the highest foreclosure numbers last year.

Michigan had the sixth highest foreclosure rate ranking in 2011, and Detroit came in as one of the still-hardest-hit cities at No. 18, according to RealtyTrac’s 2011 Year-End Foreclosure Market Report. Yet, nationwide the number of default notices, bank repossessions and scheduled auctions dropped 34 percent from 2010 to 2011, according to the report.

When it comes to how this affects the real estate market locally, foreclosures continue to impact the outlook and future of real estate trends in the metro Detroit area.

“We’re hardly seeing any,” Brian Powers, a real estate agent from Keller Williams, said of new foreclosures hitting the market. “The banks are sitting on a lot of their inventory.”

That helps to stabilize the market and is good for housing sales, the experts say. While it’s not leading to a trend of rising house values, there has been an uptick in the numbers of houses sold, with buyers taking advantage of low interest rates and value in homes, Powers said.

According to the Michigan Association of Realtors, the number of properties sold was higher for each of the last six months of 2011 than in 2010.

One thing’s for sure going forward: The banks’ decision process on when to release a backload of foreclosures will affect the market in the area in both the near and distant future.

“The question is, how long are the banks going to sit on all that inventory?” Powers said. “The banks already have enough inventory to feed the market for two to three years. That’s pretty scary.

“Hopefully, the banks have the ability to kind of slowly trickle them out,” he said.

While the banks are not releasing all of the new foreclosures they have, those who are looking to buy a foreclosure have some options.

“Foreclosures are still the largest part of the housing inventory for homebuyers to look at,” Jeff Marsack of Great Lakes Mortgage Funding said in an email.

Despite foreclosure rates slowly trending downward, homeowners struggling to make ends meet are still analyzing their options, with some looking to move on and others hoping for help from their bank.

“Banks are still very difficult to work with on mortgage modifications, and in my opinion, most modification attempts end with homeowners losing their homes versus getting the help they sought,” Marsack said.

Marsack also believes banks could help the market on the buying end.

“The underwriting requirements the big banks are putting on would-be homebuyers are more overwhelming now than in my 17 years of originating mortgages,” Marsack said. “We don’t want to ever go back to the ‘everyone gets a mortgage’ days, but we have to get some relief from the ridiculous amount of roadblocks the banks are putting in front of potential homebuyers or we will never get this anemic recovery going.”

Powers has a website, www.brianpowershelps.com, for distressed homeowners, so they can consider their options before foreclosure. You can reach Marsack at (586) 532-0600.
 

You can reach C & G Staff Writer April Lehmbeck at alehmbeck@candgnews.com or at (586)498-1043.