Michigan's Foreclosure Rate Fifth Highest In Nation

By: John Tramontana Email
By: John Tramontana Email

It's been a struggle for Dora Ray to keep her home after her monthly payment and interest rates nearly doubled over the last few months.

"It went from 10.88 to 16.88% so I've already taken a second job," she said. "Every six months, you know, it's been increasing. Every six months."

Dora thought she signed up for a fixed rate, but her loan is adjustable...meaning it can change form month to month. Her rate started low but quickly skyrocketed.

"I didn't read the fine print. They just push the pages at you and you just sign, sign, sign."

It's the same story for Kenneth Evans. His payments jumped from about $1,000 to nearly $1,800.

"My mortgage is exceeding the money I have coming in," he said. "It's taking every penny that I got."

It can be a big problem if you're not familiar with your loan agreement or if you're a victim of predatory lending.

"The consumer needs to protect themselves," said Dennis Koons of the Michigan Bankers Association. He has a few words of advice.

"Deal with a reputable lender, understand your loan document, ask questions."

Questions like will my rate change? And when? Or how much goes toward my principle? Simple questions that could help you avoid being left homeless.

People fall for simplistic solutions and promises of low monthly payments and don't look beyond that.

If fact, 1% of Michigan homes are at foreclosure, the fifth highest rate in the nation. The main reason? A poor economy as thousands are out of work. But if you do get into trouble there are still options like refinancing at a fixed rate. Tami Farnum is a home ownership counselor.

"They should recognize it right away. If they know that they're not going to make a payment the first month, they should call."

A call some say could save you your home.

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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Dee Location: MI on Sep 10, 2007 at 01:43 PM
    It is sad when people lose their homes...It is sad when people lose their jobs. What else is sad, is that our society has put material things in top priority, and so many people fall into this, and end up living beyond their means. Credit card companies need to be held accountable as well , with encouraging credit card use , yet the Interest rates are so outrageous You can barely make a dent in the amount you owe, when the majority of your payment goes to paying the interest rates and finance charges. Why cant something be done about this issue????
  • by Susan Location: Lansing on Sep 8, 2007 at 04:58 AM
    This article should also be tied in to the suicide rate in Michigan. I lost my son 9 months ago when he lost his job and couldn't make his payments. It would be interesting to know the statistics of lost of jobs and sucide rate in Michigan.
  • by Kris Location: Dewitt on Sep 7, 2007 at 03:14 PM
    The construction in Lansing is absolutely ridiculous, the state talks about not having any money but yet we are making these worthless repairs, Thanks Jenny!!! We are blown away!!
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