ESCANABA - Despite a national drop in the number of foreclosures, rates in Delta County have been on the rise. A silver lining for some - as many as 340 Delta County residents may be eligible to receive payments from the National Mortgage Settlement.
"We actually are trending higher this year than we've been in the last three years," said Chief Deputy Registrar Rob Buchler.
In October 2011, only one sheriff's deed - a certificate stating who owns a foreclosed property following a sheriff's sale - was filed. So far, six sheriff's deeds have been filed for Oct. 2012.
In 2011, there were 71 foreclosures county-wide. There have been 76 recorded foreclosures this year so far.
Nationally, the number of default notices, scheduled auctions, and bank repossessions was the lowest total since July of 2007, according to National Mortgage Professional Magazine. However, Delta County has been experiencing a foreclosure rate rivaling the rate during the 2008 housing crisis.
"This last quarter is higher than 2008, which was our highest year to date," said Buchler.
For the third quarter of 2012, which encompasses July through August, 25 sheriff's deeds were recorded. During the same three-month period in 2008, 21 sheriff's deeds were filed. There were 105 foreclosures total that year.
Those who lost their homes due to foreclosure between 2008 and 2011 - as many as 340 Delta County residents - may be eligible to receive payments from the National Mortgage Settlement.
Letters were sent to eligible foreclosure victims in September and earlier in this month. To be eligible, the mortgage that was defaulted on must have been serviced by Ally/GMAC, Bank of America, Citi, JPMorgan Chase, or Wells Fargo. Other requirements also need to be met relating to the home's occupancy, value, and the number of payments made on the mortgage.
The settlement is the result of investigations by state and federal agencies which found the five largest mortgage servicers committed errors and abuses on mortgage documents. One abuse, called "robo-signing," involved financial institutions signing large quantities of documents and affidavits without verifying information.
Those who are eligible to receive money from the National Mortgage Settlement can expect to receive a minimum payment of $840. Since the minimum payment is based on all eligible applicants filing, payments will likely be higher.
Wells Fargo of Escanaba could not be reached for comment, however, the settlement does require mortgage lenders from the affected banks to meet new servicing standards designed to protect consumers.
Besides preventing robo-signing, the new standards make loan modifications easier. Mortgage servicers will no longer be able to foreclose on a property while the homeowner is being considered for a loan modification, and denials for loan modifications can now be appealed.
"For awhile we saw a lot of loan modifications coming through, but we haven't seen as much lately," said Buchler.
Besides making the loan modification process easier to complete, the ban on foreclosures during the process could help keep homeowners in their homes.
Michigan, along with 14 other states, has shortened the average time to foreclose. Since last year, the time to complete a foreclosure has gone down by 15 percent to 226 days. For comparison, in New York the process took an average of 1,072 days in the third quarter. Nationwide, the average was 382 days.