Detroit's foreclosure rate fell dramatically in February, dropping 17 percent from the month before. The foreclosure rate also continues to show improvement from the prior year, with a 25 percent drop in foreclosures since last February, according to data from the foreclosure marketplace and tracking company RealtyTrac.
But what's most surprising is Michigan's 72 percent drop in foreclosure filings statewide since last year. RealtyTrac attributes the dramatic decreases to a changes in the law regulating foreclosure statutes.
In 2009, Michigan started requiring lenders to file a public notice of default before the notice of foreclosure sale. The policy was meant to allow homeowners more time to try to modify their loans. But the law expired late last year, and according to RealtyTrac Vice President Daren Blomquist, mortgage lenders seem to have caught up with the law and stopped issuing notices of default. He says a spike foreclosure filings might happen in several months when the notice of sales, rather than defaults, come due.
While foreclosures are not dropping as quickly as the numbers might show, a look at the rate of homes that have gone to auction shows steady decreases in the Detroit metro area for 13 straight months, something Blomquist thinks is a positive indicator.
Nationally, foreclosure rates varied from steep declines to rapid increases, but overall showed a decrease both month-to-month (2 percent down) and from the same time last year (8 percent).
While the February decline may be heartening, RealtyTrac still predicts foreclosures nationwide will go up by the end of this year. Reaching a foreclosure settlement on with the federal government in February allowed banks to get to work on their backlog of mortgages, and foreclosure filings could now pick up.
But for now, foreclosures have slowed in Michigan, and the housing market has gotten a bump, too. In the last year, Michigan Association of Realtors data showed a 14 percent increase in home sales, with a 3 percent increase in Detroit.