Foreclosure filings fell to their lowest level since 2007 nationwide last year as processing issues stalled many from completion.
Foreclosure filings dropped 34% nationwide and by 26% in Michigan in 2011 compared with 2010, according to data released Thursday by RealtyTrac, an Irvine, Calif.-based foreclosure website.
As a result of Robo-signing and other documentation issues, foreclosure processing has been delayed and it now takes 14% longer to complete a foreclosure, RealtyTrac said. In Michigan, the foreclosure process now takes an average of 283 days, up nearly 37% from 207 days a year ago.
In Michigan, delays were experienced after the state appeals court ruled in April that MERS, or Mortgage Electronic Registration Systems, could not foreclose on behalf of lenders by advertisement. That ruling was reversed by the Michigan Supreme Court in November.
That means 2012 is expected to be another bumpy year in foreclosures as processing issues clear up and lenders are able to process more quickly.
The number of properties with foreclosure filings in Michigan last year was 100,248, down 26.22% from 2010. That represents 2.21% of all housing units in Michigan.
Macomb County showed the biggest decline in metro Detroit in 2011 with 10,694 properties with foreclosure filings, a 33.6% drop from 2010. Wayne County filings were down 29% to 25,996 and Oakland County filings dropped 32% to 13,903.
In December, Michigan had the third-highest foreclosure rate with one filing for every 346 households. That compares with one filing for every 634 households in the U.S., RealtyTrac said.
The 13,128 foreclosure filings last month in Michigan include 4,494 notices of default, 4,776 sheriff sales and 3,858 bank repossessions.
Tricia Raymond, a foreclosure specialist with Keller Williams in Troy, said that though there has been a lull in foreclosure listings, more are expected this year.
“If it was really dried up and there weren’t any more out there looming and people weren’t still losing their houses, then we would be increasing in value,” she said. “Everyone knows things aren’t stable yet, and more foreclosures are coming.”
Raymond said she listed four foreclosures for sale last week and received several offers on each. Lenders have continued to release foreclosures slowly on the market, and there’s still a large shadow inventory of homes that have been repossessed but not listed for sale.
New home building has been stalled in Michigan for the past six years as the foreclosure epidemic and falling demand has made building new homes largely unnecessary.
That has created what Bob Filka, CEO of the Michigan Association of Home Builders, calls “a shortage of quality housing” in the state. That, coupled with falling foreclosures, is a small good sign, he said.
“The overall environment is it is one small sign of the overall market in Michigan improving, and that is good news for builders ultimately,” he said.
States with the top foreclosure rates in 2011 were Nevada, which has posted the nation’s highest foreclosure rate for the fifth-straight year, followed by Arizona, California, Georgia, Utah, Michigan, Florida, Illinois, Colorado and Idaho.
And states with the highest number of foreclosure filings included California, with a whopping 68,689 which accounted for 28% of the nation’s total last month, Florida coming in second with 24,739 and Michigan with 13,777.
By Greta Guest, Detroit Free Press