Foreclosure crisis continues in Kalamazoo county

The foreclosure crisis may have slipped off the front pages, but it’s not gone. The Kalamazoo Gazette reports that foreclosure is up 70 percent over last year.

And making matters worse in Kalamazoo, many of the people facing foreclosure are also victims of scam artists.

“I’d say around 15 to 20 percent of people who come here seeking help for foreclosures have been victims of scams,” said Larry Winling, a foreclosure counselor at Kalamazoo Neighborhood Housing Services Inc., a nonprofit organization that is Southwest Michigan’s federally approved foreclosure counseling agency.

Winling says the foreclosure scams look something like this: a homeowner is approached by a company offering to assist in the foreclosure crisis for a fee. The homeowner pays the fee, presuming the company will intervene and get a loan modification, only the company instead takes off with the cash, leaving the homeowner with less money and a still impending foreclosure.

And this foreclosure spike is the beginning, not the end, reports Tom Seelbinder, a local real estate broker.

Seelbinder said he suspects foreclosures will continue to increase this year. A statewide moratorium on foreclosures and a 90-day extension on foreclosures delayed many foreclosures that would have gone through end of last year and beginning of this year, he said.

The result is a backlog of properties in foreclosure, or about to go into foreclosure, that have yet to be repossessed by lenders.

“There’s a shadow inventory (of foreclosures) out there,” he said.

This is of course referring to the Home Foreclosure Prevention Act passed last spring by the legislature and signed into law by Gov. Jennifer Granholm. Some lawmakers called the legislation “too little, too late” in May of 2009 when it was passed.