Monday, November 07, 2005

Auto Industry Woes 'Waiting In The Wings'

Michigan Live reports on another city with mounting defaults. "Home foreclosures are on the rise in mid-Michigan, figures show, the result of a brewing convergence of factors. Waiting in the wings are more worrisome developments: potential layoffs and wage cuts at Delphi Corp."

"'It's kind of a trend we've seen over the last two to three years, and the biggest problem is (lenders) are refinancing (mortgages) or making it a little too easy (to get a loan), and people are getting behind the eight ball,' said Kay Kretz, a (realtor) in Saginaw Township. 'The less equity they have in (a home), the more apt they are to walk away.'"

"In Saginaw County, the number of home foreclosures for nonpayment of bank loans alone rose to 450 last year from 409 in 2003, 387 in 2002, and 298 in 2001, county register of deeds statistics indicate."

"'We're concerned,' said Michael J. Buckley, mortgage banker in Saginaw Township. 'We've already had several calls looking for options at this point and, not to single them out, but most are hourly (workers) living off the overtime pay.'"

"The problem: Many employees bought homes under the assumption they would have overtime to pay their mortgages. Now, however, some employers have cut overtime, putting household finances in precarious shape. Banks are moving 'much sooner' than ever to foreclose on homes when owners fall behind in payments, often waiting less than six months, said Midland County Register of Deeds Scott I. Haines."

"Lenders are partly at fault, he said. 'We're seeing people extending themselves (financially) more than they have in the past, and the banks are actually allowing that,' he said."

"People are walking away from their homes in surrounding counties, too. Midland County recorded 104 bank and tax foreclosures so far this year compared to 131 in 2004, 113 in 2003 and 121 in 2002, records show. Tuscola County has had 154 total foreclosures so far this year, surpassing last year's 132. The county counted 187 in 2003 and 156 in 2002, statistics show."

"Historically low interest rates encouraged more people to buy houses, and that's meant more defaults on home loans, said Tuscola County Register of Deeds Ginny M. McLaren. 'You notice the foreclosures first, then your property values start to go down,' she said. 'It just seems like a seven or eight-year cycle we go through.'"


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