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Thu May 12, 2011
Michigan's foreclosure process slows down
Michigan mortgage lenders are taking longer to foreclose on delinquent homeowners. In 2007, the entire foreclosure process in Michigan took on average 78 days to complete. This year, the average foreclosure is taking 235 days to complete. The reason is a mixture of the economy and paperwork.
According to Realty Trac, this is not just a Michigan issue:
Nationwide, foreclosures completed (REOs) in the first quarter of 2011 took an average of 400 days from the initial default notice to the REO, up from 340 days in the first quarter of 2010 and more than double the average 151 days it took to foreclose in the first quarter of 2007.
The foreclosure process took much longer in some states. The average timeframe from initial default notice to REO in New Jersey and New York was more than 900 days in the first quarter of 2011, more than three times the average timeline in the first quarter of 2007 for both states.
The average foreclosure process in Florida took 619 days for foreclosures completed in the first quarter, up from 470 days in the first quarter of 2010 and nearly four times the average of 169 days it took in the first quarter of 2007.
The average foreclosure process in California took 330 days for foreclosures completed in the first quarter, up from 262 days in the first quarter of 2010 and more than double the average of 134 days in took in the first quarter of 2007.
Daren Bloomquist is with Realty Trac. He says lenders are slowing the foreclosure process because many have too many repossessed homes that they’re having trouble selling.
“It’s in their best interest to maybe slow down the foreclosure process in some cases. To help their bottomline….as well as to be able to sell the properties that they have foreclosed on.”
Bloomquist says banks are also having trouble processing foreclosure paperwork because of new requirements to make sure all the forms are correct.
Bloomquist says this delay might be good for troubled homeowners, but it's hurting the housing industry.
Michigan had the 6th highest home foreclosure rate in the nation last month. April's foreclosure rate was down about 11% compared with March. It was down 32% compared to April 2010.