Saginaw, Michigan's Mortgage Foreclosure Crisis

Probably your home is not among the 1,073 that have faced mortgage foreclosure in Michigan's hard-pressed Saginaw County during the past 12 months, or among more than 1 million nationwide.

Still, the home loan default crisis may affect you.

Property values already are starting to fall in most neighborhoods. When the assessment process finally catches up with the market place, local tax bases may shrink and basic government services may suffer.

Furthermore, if you wish to sell your home, you will have a tougher time. And even if you make a sale, it's doubtful you will get full value.

"This is scary," says Mark Neumeier, longtime director of Neighborhood Renewal Services, which strives to promote home ownership with a blend of funds from the federal government and private financial institutions.

"It's a problem that isn't going to go away any time soon, it's a problem that will affect entire communities, and to tell the truth there really are no good solutions."

Neumeier's research indicates that Saginaw County's foreclosure total is more than double the number as recently as two years ago, and a whopping 10 times higher than during the middle 1990s.

The mortgage crisis is nationwide, with forecasts of up to 2 million foreclosures in the year to come. Some analysts say today's housing market suddenly has become the worst since the Great Depression. The Rev. Jesse Jackson echoed those thoughts in a highly publicized recent Michigan tour that included Saginaw.

President Bush is urging lenders to show teamwork in compromising on mortgage terms, while Democrats are taking a step beyond by calling for direct infusions of federal aid.

Low-Income, High-Income

Troubles are most severe in two types of areas. The first area is in distressed communities such as Saginaw, in which people are struggling with declining incomes and overextended credit. The second area, ironically enough, is in upper-scale developments in places such as Florida and Arizona where speculators face a stagnant market.

Neumeier is capable of giving a full hour's dissertation on the causes, but for our purposes he sums up in a nutshell: