Michigan foreclosure rate is nation's sixth highest

One in every 136 Michigan housing units received a foreclosure filing during the first three months of 2009 -- a bleaker rate than the first quarter of 2008.

And as dismal as the January-March figure sounds -- and it was a 12 percent increase from the same period last year -- it was actually a slight improvement from the last three months of 2008.

RealtyTrac reported Wednesday that Michigan recorded the sixth highest foreclosure rate, per total state households. Nevada topped the grim list, followed by Arizona and California. In Nevada, one in every 27 housing units was hit by a foreclosure filing.

Nationwide, one in every 159 homes received a foreclosure filing during the first three months of this year -- the highest national total since RealtyTrac, an online marketplace for foreclosure properties, began issuing its periodic report in January 2005.

RealtyTrac's report incorporates documents filed in all three phases of foreclosure: default, default notice and lis pendens (a legal notice, filed by the lender, that starts the foreclosure); notice of trustee or foreclosure sale; and properties that have been foreclosed on and repurchased by a bank.

"In the month of March, we saw a record level of foreclosure activity; the number of households that received a foreclosure filing was more than 12 percent higher than the next highest month on record. Since much of this activity was in new foreclosure actions, it suggests that many lenders and servicers were holding off on executing foreclosures due to industry moratoria and legislative delays," said James Saccacio, chief executive officer of RealtyTrac.

"It's also likely that the drop in (bank repossessions) can be attributed to these processing delays, rather than to any of the foreclosure prevention programs currently in place. It's very likely that we'll see the number of (repossessions) increase again, now that most of the moratoria have been lifted."

There is a positive note, Saccacio said. Housing demand is up in some of the harder-hit areas, particularly on bank-owned properties that first time homebuyers and investors see as bargain.

But, he added, "It's unlikely that this increased demand will be enough to offset the growing number of foreclosures in the pipeline, accelerated by rising unemployment rates."

Michigan recorded 33,184 foreclosure filings between January and March. That's a 1.9-percent decline from the fourth quarter of 2008. .

During the first quarter of 2009, Metro Detroit's rate declined 6 percent compared with the same period a year ago. In Metro Detroit, one in every 275 housing units faces foreclosure.

New housing construction in Southeast Michigan remains at a standstill, according to Housing Consultants Inc. in Clarkston. The nine-county area saw an 83.1 percent decline in new building permits, compared to the first months of 2008.

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