Foreclosed Homes Auction in Michigan Slows Down Temporarily

Foreclosed homes auction companies operating in Michigan have temporarily slowed down their activities in the state due to a decline in completed foreclosures.

During the holidays, major banks deferred their scheduled foreclosures. They also have been allowing distressed borrowers to negotiate for loan modifications. Additionally, they have been strategically controlling the release of their foreclosed properties to the market in order to prevent sharp price declines and to lessen the impact of foreclosures on their books.

According to Laurie Bunn, top executive of an online real estate auction firm launched last year, her firm expects business to pick up in the second quarter.

Although foreclosure postings in Michigan were still rising over the latter part of last year, the number of completed foreclosures ready for auction has been declining due to various delays.

Based on figures from a California-based foreclosure research firm, the pace of foreclosure in Michigan was still among the highest in 2009. More than 118,000 houses across the state received default and foreclosure notices, marking an almost 12-percent jump from notices in 2008 and a nearly 36-percent increase from 2007.

Almost 1.4 residential units in Michigan were in the foreclosure process last year, ranking the state eighth in the U.S. in foreclosure rate.

Various delays, however, both as a business strategy and in compliance to the federal loan modification program, have slowed the entry of foreclosure properties into the market.

Even large auction firms like Texas-based Hudson & Marshall have not scheduled any foreclosed homes auction in February in Michigan.

In 2009, Hudson & Marshall sold off 966 foreclosed homes in Michigan, a significant drop from the 1,700 units sold in 2008. According to principal Dave Webb, the firm expects to auction off 600 units this year in the state.

Webb said that his firm, which conducts auctions across the nation, sold most Michigan homes in 2009 during the first months. He added that the three-month moratorium implemented by the state in 2009, in addition to the federal loan modification program, slowed down the foreclosure process.

REDC, another large auction firm, also only had a few Detroit foreclosures in its properties ready for auction this month. Nationwide, the firm sold off properties worth $3.4 billion in 2009.

According to Webb, his firm Hudson & Marshall will return to Michigan in the middle of March to hold a foreclosed homes auction for about 200 properties that have been listed for sale for more than three months.

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