Michigan foreclosures on rise again

Foreclosures on rise again
Mich. rate is 2nd highest in quarter
FREE PRESS STAFF, NEWS REPORTS • June 6, 2008

The foreclosure hammer is hitting ever harder. People lost their homes at the highest rate on record in the first three months of the year, and late payments soared to a new high, too -- an alarming sign that the housing crisis and its damage to the national economy may only get worse.

Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices -- extending a vicious cycle.

Nearly 1%, or roughly 447,723 loans, fell into foreclosure during the January-to-March period, the Mortgage Bankers Association said Thursday in its quarterly snapshot of the mortgage market. That surpassed the previous high of 0.83% over the last three months in 2007.

The report also found that more homeowners slipped behind on their monthly payments. The delinquency rate jumped to 6.35% -- or 2.87 million loans -- compared with 5.82% for the previous three months. Payments are considered delinquent if they are 30 or more days past due.

Both the rate of new foreclosures and late payments were the highest on record going back to 1979.

Michigan had the second-highest delinquency rate for all loans with 7.84% delinquent in the first quarter. Mississippi was first with 9.41% and Georgia was third with 7.36%. Michigan's foreclosure inventory was 3.61% in the first quarter.

Nearly 8.5 million homeowners now have negative or no equity in their homes representing 16% of all homeowners with mortgages, according to Mark Zandi, chief economist at Moody's Economy.com. He estimates that will increase to 12.2 million, or almost one out of every four homeowners, by the end of June.