Foreclosure Crunch in Michigan

Michigan foreclosure homes have always been in news due to the impact they have on people’s lives. The price of the house does not really matter, what matters is it can easily turn in to a foreclosure home, whether it’s a million dollar property or several thousands worth. Michigan foreclosure homes have been in rise for quite some time now and the Lansing area is leading the race. The first six months of this year saw 2,746 foreclosure homes which is 24 more than the first half of 2006. Eventually, Michigan ranks fifth in the national race of foreclosure homes, behind California, Florida, Ohio and Arizona. Most of these states are known for the costliest real estate properties, the Lansing area has been touted to have been affordable properties in the county.

Most of the experts believe that the economy of the state is responsible for an increased number of foreclosed homes in Michigan. The unemployment rate can be easily correlated with the rate at which foreclosure homes in Michigan are increasing. The Michigan’s jobless rate was 8.5 in the month of June when the national rate was 5.5. Mortgage scams and lax lending standards also have substantial contributions in increased number of foreclosure homes in Michigan.

Foreclosed homes in Michigan are facing maintenance problems due to lack of attention. Banks are known to hire professionals to take care of the foreclosure homes but not until they are foreclosed. The entire process takes up to a year, in the meantime the foreclosure home may take a bad shape. This problem really brings down the prices of the new properties in the neighborhood. The prices of other properties also go down due to an increasing number of foreclosure homes.

Selling a home whether foreclosed or new has become a lot tougher in Michigan owing to the falling price of the property and tough financing terms. The lenders terms and conditions to mortgage funds have become tougher since the homeowners are asked for more down payments, making it difficult for them to qualify for a mortgage. This is one of the reasons why most of the homeowners short sell their houses to avoid foreclosure activity.

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