Home / Daily Dose / Motor City’s Reverse Mortgage Foreclosure Problem
Print This Post Print This Post

Motor City’s Reverse Mortgage Foreclosure Problem

Detroit is one of the leading cities in the nation in reverse mortgage foreclosures, according to reporting from Detroit Free Press. USA Today analysis estimates there has been around 1,884 reverse mortgage foreclosures in Detroit between 2013 and 2017, the highest number in the country.

Looking at data from the Department of Housing and Urban Affairs, the Free Press found that urban, African American neighborhoods, such as those in Detroit, were hit particularly hard by reverse mortgage foreclosures. “Many were targeted by reverse mortgage brokers after the recession when money was tight in neighborhoods where credit was traditionally less accessible.”

Reverse mortgage foreclosures are not the only foreclosure issues hitting Detroit, but measures are being taken to prevent these foreclosures. According to a recent study from Quicken Loans, property tax foreclosures in Detroit are at a 14-year low. In 2018, 2,920 properties faced property tax foreclosure auction, down from 6,052 in 2017, and far below the peak of 15,000 in 2015.

According to the Quicken Loans, the efforts of the Quicken Loans Community Fund and its Neighbor to Neighbor partners led to 4,136 occupied homes being pulled from the Wayne County tax foreclosure auction.

“Tens of thousands of Detroit residents have been displaced by property tax foreclosure, and on top of the human impact, many of these homes fall into disrepair and become blighted, perpetuating a harmful cycle that destroys vibrant communities,” said Laura Grannemann, VP of Strategic Investments for the Quicken Loans Community Fund. “By working with community partners, we are stabilizing housing in Detroit, preventing future blight and helping homeowners and occupants find sustainable, long-term solutions for their property tax burdens.”

Although outreach programs have helped improve Detroit's tax foreclosure issues, the city still faces other foreclosure-related challenges. According to GOBankingRates and data from Zillow, 34.4% of homes are currently underwater, and the median home value at the Detroit-Warren-Dearborn metro-area level is $161,300, far below the national median of $226,300. GOBankingRates puts Detroit second on its list of U.S. cities most likely to enter a housing crisis.

About Author: Seth Welborn

Seth Welborn is a contributing writer for DS News. He is a Harding University graduate with a degree in English and a minor in writing, and has studied abroad in Athens, Greece. An East Texas native, he also works part-time as a photographer.
x

Check Also

Mortgage Debt on the Rise, Volume of Mortgages Falling

During the same time frame of the household-owned value of the U.S. housing market reaching ...

GET YOUR DAILY DOSE OF DS NEWS

Featuring daily updates on foreclosure, REO, and the secondary market, DS News has the timely and relevant content you need to stay at the top of your game. Get each day’s most important default servicing news and market information delivered directly to your inbox, complimentary, when you subscribe.