Foreclosures in Big Cities
Detroit has seen ups and downs during the last forty years. At one time it was proud to have the highest figures as regards house ownership in the entire country. Today it topped the ranks of foreclosure offenders in 2007.
This has aggravated its woes. About 5% of all the houses in Detroit was in some stage of foreclosure in the previous year. The rate is five times higher than the national average. It is 68% higher than 2006. There were 72,616 default/action notices or bank repossessions on 41,273 units in the Wayne County cities of Detroit, Livonia and Dearborn. In the adjacent counties of Oakland and Macomb foreclosures are also on the rise. Here more than 2% of all the houses were in the foreclosure embrace – the rate being 95% higher than 2006. Of the jumbo cities in US, 86 saw foreclosure increases – of these the notables were Stockton, California, Las Vegas and Nevada, with the last two ranking second and third.
Detroit has been reeling under the automobile crisis. Nearly 150,000 have lost their jobs because of trimmings in the auto industry. Workers are being offered half the wages as a compromise. Little wonder then that foreclosures increased.
Michigan has the third highest foreclosure rate in the country with over 2% of all houses sitting in the risk zone. There was an increase of 68% over 2006 and an awesome rise of 282% from 2005. Michigan has the highest number of sub-prime loans as well as unemployment rate.
Personal bankruptcies rose in US by 30% in January. Over 1 million sub-prime adjustable rate mortgages are ready to reset in the current year of 2008. The American Bankruptcy Institute is gearing up to meet the avalanche.
The Attorney General of Michigan organized a workshop in Detroit on 12th February focusing on the foreclosure crisis. Kevin Anderson was one of the many with a sad story to tell. He had been peddled a mortgage then went up from $1,300 to $1,778. In all probability it will go up to $2,778 per month – something well beyond his means. Another person named Duane Fox said that he had refinance his house twice for a house that has been his for generations. Both times fees on various heads were charged but still the debt is a staggering $80,000.
The general feeling is that this sub-prime ARM programme was a crime from the start – set to fail.
