Thursday, June 07, 2007

Explosion in Oakland foreclosures hits home; 11% of Birmingham is for sale

By John McTaggart

Despite Birmingham’s affluence, the long arm of Michigan’s troubled economy has grabbed hold of some residents and resulted in a sharp increase in the number of unsold homes and foreclosed properties.

“The numbers are staggering to look at," Oakland County Housing Counselor Kathy Williams said. "We have seen a dramatic upturn in the number of foreclosed properties.“

Neither Williams nor officials of the U.S. Department of Housing and Urban Development could provide specific numbers for foreclosures in Birmingham. But in Oakland County, the number of foreclosed properties increased 679 percent since 1998, from 715 in 1998, to 4,855 in 2006.

The number of homes for sale in Birmingham is more readily available. Currently, 998 homes are on the market in Birmingham, according to a Realtor.com search of the 48009 Zip code. That represents 10.9 percent of the 9,131 households counted in the most recent census in 2000. Not counted are the number of homes that would be on the market if it were not depressed.

Foreclosure “affects people from all walks of life,” Williams said. “The size and value of your home really isn’t a factor. Larger, more valuable homes and properties can be just as difficult to afford. It’s all relative.”

“I honestly never thought I would see the day,” said former Birmingham resident Franklin Seebe, 43. “But once it started, it just seemed to snowball out of control.”

Seebe, and his wife, Mattie, lived in Birmingham for the better part of a decade, deciding to settle here for many of the same reasons many Birmingham citizens make the town home.

“We fell in love with the atmosphere first of all,” Seebe said. “It was safe, the downtown was vibrant and growing, and it had that old-town feel. We loved that. It was someplace we probably would’ve stayed for the rest of our lives, even if we moved to another house in another part of town.”

With those feelings in mind, the young couple purchased a home on Webster in 1998 and began remodeling before they even moved in.

“Looking back, we probably over-mortgaged a bit, and made a poor choice in going with an adjustable rate mortgage. Then we made it worse by adding the costs of the upgrades to the house with credit cards,” Seebe said. “We just didn’t know any better. We just never could’ve imagined what would happen..”

What happened was Seebe lost his job in the fall of 2005, and his six-figure salary, then lost the home he and his wife loved so much just nine months later. They now live in a rented condo in Sterling Heights.

“We tried everything we could, but there just weren’t any jobs out there for me making anything close to what I made before,” Seebe said. “I believe there are a lot of families in that kind of position, some even in Birmingham.”

The Seebes tried to sell their home at first, but couldn’t find a buyer.

“It’s embarrassing, especially when you stop to consider how well we were doing just a few years before that,” Seebe said. “In fact, we never did say anything to the neighbors. Maybe they figured it out, but you just don’t want to have to admit something like that to people living right next door to you, in a house like yours, one they’re able to pay for. The lesson we learned is to be better prepared. It’s tough though. You’re young and excited and feel like those things just happen to other people. It doesn’t happen to people living in Birmingham.”

It does happen to people who live Birmingham, as well as those beyond its borders, according to Chicago-based mortgage banking analyst Dustin Mannis.

“Michigan’s economy troubles are far-reaching,” Mannis said. “It really doesn’t matter what your economic status is. Although Oakland County is generally viewed as a very well-to-do region, there are real people with real financial hardships. Unless you have cash reserves for these rainy day situations, then foreclosure is a real possibility when you lose your primary source of income. For most people, their home is both their biggest investment and their biggest expense. And with every investment there is risk.”

Like the Seebes, many homeowners facing foreclosure never really weigh the risk factors involved with their home, nor the possibility of unforeseen troubles.

“It’s just not something most people view as a real possibility,” Mannis said. “They just never think, when they buy their home or piece of property, that it can be lost. It’s avoidable, certainly, but it also can happen, and does happen all the time, even in Oakland County.”

Williams says there are many reasons for foreclosure, but some seem to crop up more than others.

“Generally, there are three or four reasons that can lead to foreclosure,” Williams said. “Of course, one is the loss of a job or a decrease in income. Then there is the loss of equity in some homes, the ease of over-mortgaging, and finally, adjustable-rate mortgages. These are probably the most common reasons. There are others, of course, but these seem to be the most common.”

“There are ways for people to get help, however,” Williams said. “They just have to seek it and not be afraid to utilize it.”

The Oakland County Community and Home Improvement Division is one option, says Williams. “It’s free of charge, and we provide residents with totally unbiased recommendations. We’re here to help.”

The division can be reached at (248) 858-5402, and is located at 250 Elizabeth Lake Road, Suite 1900, in Pontiac.
Mannis’ advice is simple: Keep in close contact with your mortgage company. “Let them know the situation, and let them know often,” Mannis said. “They really don’t want your house. There are significant costs that go along with foreclosing on a property. They don’t want to incur those costs and the hassle of trying to sell it themselves. They will work with you. Believe me, they will do everything they can. Property owners just have to reach out to them.”

For the Seebes, help never arrived.

“In a way, we miss it everyday,” Seebe said. “But we’ve moved on and are trying to start over. It’s been tough, but we’re getting through it. I just would like to say that just because you may have a nice home in a nice town, it doesn’t mean something like this can’t happen to you. It can.”