Foreclosures reached record levels throughout Washtenaw County last year—and the biggest increases were in the Community Observer’s backyard. In 2008, the number of homes sold for delinquent mortgages doubled in the village of Dexter, and more than doubled in Chelsea and the townships of Dexter, Lodi, Saline, and Sylvan. That compares to a 25 percent rise countywide and a 36 percent increase in Ann Arbor, according to the Washtenaw County Register of Deeds.
“Foreclosures are just now catching up to the outlying communities,” says Barbara Lunarde, office manager for Real Estate One in Dexter. Foreclosures are “sprinkled throughout” the area, she says, and cover a variety of home prices and styles, as well as vacant land, rentals, and a few commercial properties. But they tend to cluster in newer subdivisions on the edge of the older towns.
Those aren’t poor neighborhoods—and people defaulting aren’t all in dire straits. Some are just cutting their losses. “More homeowners have decided to walk away from their homes because they are hung up with these large mortgages,” says Lunarde. “They’re starting to realize: This isn’t their fault that everything crashed around them.”
Everything includes the sub-prime lending debacle, fewer home buyers, fewer jobs and less job security, housing prices dropping dramatically, and the credit crunch that has made borrowing tougher.
“There are very few buyers” for real estate now, says John Mann, president and CEO of Chelsea State Bank. In the past, when landlords or homeowners got behind on payments, they could sell before a foreclosure. Now that’s unlikely.
Chelsea State Bank foreclosed on four homes last year—all rental properties. “That is up substantially,” says Mann. “In the twenty years prior to 2008, I believe we foreclosed on a total of two or three homes.”
In Chelsea, twenty-seven homes or other real properties were sold at a sheriff’s auction last year—compared to twelve in 2007. That was about one foreclosure for every 177 residents. Saline had one for every 223 residents, and Dexter had one for every 275 people.
James Dries, chief deputy clerk for the Register of Deeds, says it’s too early to forecast foreclosures for 2009, but he sees “no letup at this point.”
One encouraging sign: More people are refinancing their mortgages in recent months, Dries says. That likely includes some who had creative or toxic mortgages and were at risk of bank repossession. “Maybe that will cut into the foreclosure market,” he says.
Mann’s advice: If you start to fall behind on mortgage payments, talk to your lender. “We can extend maturities, reamortize the loan to lower the payment,” he says. “The last thing that my bank wants is a foreclosure.”
