2009 shows drop in filings
By Steve Herring
Published in News on January 19, 2010 1:46 PM
Foreclosure starts in Wayne County for the final quarter of 2009 were up by a third over the same period in 2008. However, for the year, the number was down by 12 percent.
County Clerk of Court officials said they were somewhat surprised by the decrease and could not offer any clear insight as to why the totals were up by 35 percent for the final quarter. Several factors could have played into the increase, they said.
"We have been told a while back by some of the offices that some of their cases, they were trying to continue them," said Annette Strickland, who along with Clerk of Court Pam Minshew and Kaye Faircloth act as probate judges for foreclosure hearings. "They were waiting to see what was going to happen with the law, what was going to happen to offer more protection to people and that sort of thing so they kind of had them on hold.
"I don't know if they decided to wait until the end of the year. But it has picked up, but we don't know why."
Also, it is possible that some of the starts filed in the final quarter actually date back months and which had been delayed to allow the borrowers a chance to catch the loans up, she said. It could also include foreclosures that were halted when the borrowers were able to catch up on the loans, only to fall behind again.
According to information provided by the state Administrative Offices of the Courts, the quarterly starts of foreclosure proceedings in Wayne increased by 37, from 106 to 143. The increase closely mirrored statewide figures where starts increased by 4,915, or 41 percent.
The county recorded 48 foreclosure starts in December -- an increase of five from November for a 12 percent increase. Fifteen starts have been filed as of Jan. 15. Of those, 11 involved prime rate mortgages, while four were subprime.
There were 472 foreclosure starts in 2009 in Wayne County, down by 64 from 2008's 536 total -- a 12 percent drop.
Since the start of the foreclosure crisis in January 2005, there have been 2,555 foreclosure starts in the county, representing 9.2 percent of year 2000 owner-occupied housing units.
Statewide there have been 255,420 starts during that period, representing 11.8 percent of year 2000 owner-occupied housing units. December starts across the state increased by 229, a 4 percent jump.
The Clerk of Court's office does not become involved in the foreclosure process until after it is triggered by the lenders.
"The lender appoints a substitute trustee, sort of a holder of the property," Ms. Strickland explained. "He has to be a neutral party. He doesn't have an interest in the bank. He doesn't have an interest in the people who are being foreclosed."
The appointment is another matter "handled without us," she said.
"The substitute trustee files foreclosure," she said. "When we get the foreclosure proceedings they also provide us with copies that the sheriff is going to serve on those people. They try to contact the people because they are entitled to know they are being foreclosed on. The next step is a hearing."
There are normally 10 to 20 such hearings a week. However, 13 were held last Thursday alone.
"That is not the norm," Ms. Strickland said.
There is an average of four to five dismissals a week, as well.
There is a 45-day notice before the foreclosure is filed, spelling out what is owed and what needs to be done to bring the mortgage up to date.
Once the filing is served, a hearing has to be held within 10 days. If the borrower cannot be found and the papers have to be posted instead, then the hearing has to be held within 20 days.
"On the hearing day, the substitute trustee and the respondents being foreclosed on have a right to appear at that hearing if they want to, but in most of our cases, they do not. Most of them don't even show up. They can come alone or have an attorney. Most of the time they don't show up at all. There have been times when we have attorneys to represent them, but it does not happen very often," Ms. Strickland said.
By the time the case is heard, the homeowners have had opportunities to get caught up and have been unable to do so, Ms. Minshew said.
"By the time they get here they know there is no way to save it. Some do work to try to save it, but can't. A lot of time they don't want the property anymore. They want to be out from under it. We have had people to show up at our hearings who tell us, 'I am not here to contest it.'"
The hearings are held in a conference room on the third floor of the county courthouse annex before either Ms. Strickland, Ms. Minshew or Ms. Faircloth.
"During that hearing we have to look for five elements," Ms. Strickland said. "We have to know if there was a valid debt. We have to know if there was a default on that debt. We have to know if there is a right to have a foreclosure sale. We have to know that proper notice was given and then we have to decide if it is a subprime or prime loan. Those we do in order."
If those five elements are found, the probate judges have no choice but to sign the papers.
Once signed, the next step is a foreclosure sale. The substitute trustee posts the notice of sale on the bulletin board at the courthouse to provide public notice of the sale. They also run ads in newspapers.
At any point the process can be halted if something can be worked out to settle the debt or if the substitute trustee decides to continue the sale to another time if they are trying to work out something, Ms. Strickland said.
"They still have opportunities to save their property. We do have a lot of those. I couldn't give you any sort of percentages," she said.
Also, in some cases, the foreclosure may be stopped because of bankruptcy, but could resume depending on the outcome of that proceeding.
"We are starting to see more of the commercial loans now that are starting to be foreclosed, the developer, the contractor," Ms. Strickland said. "We are starting to see more of that than we did last year or the year before."
She said that eight of the nine hearings she conducted last Thursday involved commercial loans.
Hearings can be involved, but more often than not last not much more than 15 minutes, she said.