Due to layoffs and increased mortgage loan payments, more and more homes in the suburbs of Detroit are being added to foreclosure listings. While these foreclosure properties represent harrowing losses to their former owners, they represent attractive opportunities for homebuyers looking for lower-priced homes for their families.
While foreclosure cases in Wayne County declined in February because of decreased filings in Detroit, properties added to foreclosure listings in Oakland and Macomb increased significantly over 2008 figures, according to foreclosure tracking firm RealtyTrac.
Daren Blomquist of RealtyTrac said Detroit’s foreclosure trend represents the trend happening in large cities—falling foreclosure filings in the centers while increasing in their suburbs. He said Chicago and Cleveland have also been experiencing the same trend.
While the number of properties in foreclosure listings in Wayne County fell by nearly 30 percent in February, foreclosures in Oakland and Macomb increased by 25.12 and 62.5 respectively.
Blomquist said the main reasons were job layoffs and the adjustments of risky mortgage loans, which were commonly offered to borrowers who bought homes in suburban areas.
In 2008, Wayne County accounted for a great deal of Michigan foreclosures because of foreclosures involving adjustable-rate subprime mortgages. These loans, which involved low initial monthly payments, were used to attract prospective homebuyers with unsatisfactory employment and credit records. The loans carried high interest rates that would be applied after the initial paying periods.
During the last months of 2007 and first months of 2008, many homeowners saw their monthly payments surging to amounts they can no longer afford to pay. Many of them also preferred to give up their homes when home values began to drop rapidly.
The only good thing coming out of these foreclosures for prospective homebuyers is the availability of good homes in good locations previously out of their price range.
In Grosse Point, a property previously valued at $1.2 million has been listed in foreclosure listings at half the price.
Bargain-priced properties in attractive sites such as Bloomfield Hills, Chesterfield and Pinckney have also started appearing in foreclosure listings.
First-time homebuyer Dan Glander has bought a bank owned three-bedroom house in Clawson for only $86,000. His real estate broker Keena Catanzaro said the short sale transaction took 4 months to complete because of hundreds of bank owned properties in foreclosure listings in Oakland and Macomb, overwhelming the banks. She said short sales or sales from foreclosure listings have been accounting for 80 percent of home sales in some Detroit suburbs.
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