Michigan Homeowners Losing Their Houses More Often

By: Lauren Zakalik Email
By: Lauren Zakalik Email

For a growing number of local homeowners, the often-exciting venture of owning a house is quickly turning sour.

Activist group ACORN released a study Wednesday putting Michigan fifth in the nation for home foreclosures, with Lansing as one of the most-affected cities. Last April there were 102 foreclosures in Lansing; this April, that number jumped to 221.

Job loss and a sluggish economy are atop the list of explanations, but mortgage expert Jim Thelen expands.

"Adjustable rate mortgages-- their rates are adjusting at a larger percent than [the homeowners] used to, up 1 or 2 percent, and they can't always manage it," Thelen says.

Homeowners in Michigan seem to have been especially enticed by sub-prime lenders and adjustable rate mortgages. But those rates can skyrocket-- oftentimes with no notice, leaving the owners unable to make the bigger payments.

"Often the homeowners didn't do their homework, they don't know all the details, they're not listening to their lender-- or their lenders aren't telling them everything," Thelen explains. "You need to have a local lender you can trust."

Even if a person is in danger of losing his or her home to foreclosure, there are things to do to make sure it doesn't happen.

Call your lender immediately, Thelen advises. He says people are often scared to admit to their lenders they can't make their mortgage payments, but alerting the lender first is extraordinarily important. Often the lender can work out ways to extend payments.

"The last thing a lender wants is your property," Thelen says.

And don't always believe what you see online. Certain loans and mortgages may look highly attractive on the Web, but the fine print isn't always clear. Make sure the contract doesn't have any hidden clauses that could make your payments unmanagable.

Decide how much you can afford to pay per month before you visit a realtor or lender. That way, the big numbers they offer you-- what you are approved for-- won't affect your decision.

Thelen says if every homeowner took advantage of fixed-rate mortgages, Lansing's foreclosure rate could see a healthy and much-needed drop.

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  • by Matt Location: Monroe on Jun 22, 2007 at 02:42 AM
    Hello, I'm a real estate investor, many people call me with ARM's, it going to shoot up, and usually its more than they can possibly handle. I ALWAYS have them refinance to a fixed rate, yes it may be more sometimes, but the monthly doesn't go up!!! You have alot of people with bad credit, usually its because of numerous medical bills. With crap credit, they are offered a low-low-low payment with the arm hitting up in 2 yrs. Right now they pick it up, not knowing what the economy will do in 2 yrs, loss of job, there are many reasons why the can't refinance it and at that point in time they are basically burnt.
  • by Rob Location: Jackson on Jun 21, 2007 at 10:15 AM
    Look at the tax changes. With this economy the state can come and tack your house faster than ever. We are quickly become a 3rd world country where only the greedy will have the rest will be homeless and in boxes before too long.
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