When the housing market suffered a dramatic hit in 2007, foreclosures in Washtenaw County, Michigan went up by roughly 65%, with thousands forced to go through the foreclosure process each year.

But the devastating effect of foreclosures in Washtenaw County is not just confined to this area because this could be a precursor to the continuation of foreclosures in other declining areas like Detroit.

However, some states should take notice of Michigan’s decision to introduce a law which gives those going into foreclosure at least 90 days to work out a deal with their lender. This meant that the number of foreclosures in Washtenaw County actually fell by roughly 300 in 2009.

Catherine McClary, who acts as treasurer for Washtenaw County, said that many people also stressed themselves out unnecessarily because they didn’t know the difference between tax foreclosure and mortgage foreclosure. Donna Iadipaolo, a reporter in the Washtenaw County area, outlined exactly what the difference is as she said that:

“The tax foreclosure process begins when someone doesn’t pay their property taxes. The mortgage foreclosure process begins when someone doesn’t pay their monthly mortgage.”

McClary said that the mortgage foreclosure process comes in three waves as the cycle turns. She said that the first wave came as a result of predatory lending practices. This is certainly true because many all over the United States believed that it was the ultimate goal to own a home. Naturally, this meant that lenders would take advantage of this desire to own one’s own home, but when the bubble burst in 2007 this was only going to end one way.

However, the situation only got worse with the global economic recession which hit soon after. McClary is absolutely right about characterizing the declining economy as the second wave of mortgage foreclosures because the economic crisis exhausted everyone’s resources.

However, what McClary didn’t mention about the second wave was the increasing unemployment rate, not just in her county but all across America. This certainly had to have an effect because when people first decided to buy their own home they were banking on paying off their mortgage by using their formerly steady and stable job. But with mass job losses across the nation this meant that many were left financially stranded after they lost their jobs. The final wave is where the lenders themselves have been unable, or unwilling, to pay their taxes. This means that they have simply walked away from their homes instead.

But the numbers of delinquent taxes are in decline so this is a positive sign for the number of foreclosures, according to McClary who explained the situation:

“If delinquent taxes trend higher than in years prior, it foretells or indicates that foreclosures will be higher. When delinquent taxes trend lower, as they seem to be, it means that there is less delinquent activity to become foreclosure activity.”

Overall, this probably means that there is a light at the end of the tunnel when it comes to foreclosures.