MI Foreclosures Decline, Still Ranked 4th Highest
DETROIT (AP) – Michigan remains among the top ten states with the highest foreclosure rate despite steady declines.
RealtyTrac Inc. says Michigan foreclosure activity decreased 16 percent from January and was down 30 percent from February 2010, but the state’s 14,003 properties with a foreclosure filing was still the nation’s fourth highest. Among U.S. metropolitan areas with populations of 200,000 or more, the Detroit-Warren-Livonia area ranked No. 18 in foreclosure rates.
Nationally, the number of U.S. homes receiving a foreclosure-related notice fell to a 36-month low last month, as lenders delayed taking action against homeowners amid heightened scrutiny over banks’ handling of home repossessions.
Some 255,101 properties received at least one of the notices in February, down 14 percent from January and 27 percent versus the same month last year, according to foreclosure listing firm RealtyTrac Inc. While severe winter weather was likely a contributing factor, the sharp drop-off was primarily due to lenders taking a more measured approach to their foreclosure processes since the industry came under fire last year.
State and federal officials launched investigations last fall into foreclosure procedures used by mortgage servicers and lenders after evidence surfaced that some major banks pushed through hundreds of foreclosures a day without giving many borrowers a fair shot at keeping their homes.
Several large banks, including Bank of America, Citigroup and JPMorgan Chase, have been in talks to settle a probe launched by 50 state attorneys general over their handling of foreclosures. Many lenders temporarily froze foreclosures last October while they reviewed and, in some cases, re-filed foreclosure documents. That process has continued this year, but in less-than-speedy fashion due to backed-up court dockets and other procedural road bumps.
Initial default notices fell 16 percent from January and 41 percent from a year ago, while scheduled foreclosure auctions declined 10 percent versus last month and 21 percent from February last year, RealtyTrac said.
Meanwhile, lenders repossessed 64,643 homes last month, down 17 percent from January and 18 percent from the same month last year. Repossessions declined 35 percent in states where courts play a role in the foreclosures process.
The decline in foreclosure notices has slowed not only the pace of homes lost to foreclosure, but also stemmed the tide of additional properties potentially at risk for repossession. That’s good news for homeowners in trouble, but it’s unlikely to portend fewer foreclosures in the long-run.
“The issue isn’t whether we’ll see the repossessions – it’s when,” says Rick Sharga, a senior vice president at RealtyTrac. Should the foreclosure process slowdown continue for several months, it’s likely foreclosure notices and bank repossessions will remain artificially low, Sharga says.
That could help stem home price declines and the number of homes taken back by banks, which hit a high of more than 1 million last year. Such a reprieve would only be temporary, however.
“Even though foreclosure activity would look better, it would take the housing market and the economy longer to recover,” Sharga said. “We might not see the market come back until 2014 or 2015.” However, if banks’ foreclosure paperwork issues get resolved sooner, rather than later, foreclosure activity is likely to spike again, Sharga added.
Around 5 million borrowers are at least two months behind on their mortgages, and experts say more people will miss payments because of job losses and loans that exceed the value of the homes they are living in.
At a state level, Nevada posted the nation’s highest foreclosure rate for the 50th consecutive month in February, with one in every 119 households receiving a foreclosure notice. Arizona had the No. 2 spot, while California held the third-highest rate of foreclosure.
Rounding out the top 10 states with the highest foreclosure rate in February were: Utah, Idaho, Georgia, Michigan, Florida, Colorado and Hawaii.
(Copyright 2011 by The Associated Press. All Rights Reserved.)