There were fewer sales of foreclosed properties conducted by the Kent County Sheriff’s Department last year: The total number fell by 807 from 2008. That decrease halted a streak that had risen annually for four straight years.
Still, the 3,148 sales held in 2009 were nearly 1,900 more than just five years earlier, in 2004. From 2004 through 2009, 15,616 properties in the county made it through the Sheriff’s sale, according to data recorded by the Kent County Register of Deeds. The biggest spike in foreclosure sales in that period occurred in 2006, when the number rose by more than 1,000.
The number of Sheriff’s sales, though, doesn’t account for all the foreclosures that may have occurred in the county. That number only includes transactions that have made it through the auction process and have been registered as Sheriff’s deeds with the county. Homeowners who turn over the keys and walk away or sign over a deed to a lender aren’t included in the count. Neither are tax-foreclosed properties.
“The Sheriff’s sale is the mortgage company’s way of trying to seal the deal, if you will, on a foreclosure. But a lot of them don’t necessarily go all the way through that process,” said Kenneth Parrish, Kent County treasurer.
“What typically happens is the mortgage company will actually be the high bidder on a sale, if no one else bids close to what is owed on the mortgage. The mortgage company essentially bids that amount in order to protect their mortgage,” he added.
The big question, of course, is why foreclosure sales fell last year. Have they peaked in the county? Or did the 90-day moratoriums that some banks voluntarily placed on foreclosure actions last year lower the number, which led to fewer auctions?
“I think it’s a combination of the two factors. I think there was kind of an initial push to foreclose on properties. Ultimately, what happened was the banks and mortgage companies were sitting there with all this real estate that they didn’t want and couldn’t get rid of,” said Parrish. “So I think they started to slow down their process. They were more willing to work out new financial deals with the homeowners in order to avoid foreclosure.”
Even fewer properties may make it to the Sheriff’s auction in the not-to-distant future, as some foreclosed homes may be purchased by the Kent County Land Bank Authority.
“At this point, we’re in the start-up phase, so we don’t have the resources to actually go buy those properties, because I’m sure that mortgage companies would want to recoup most of the mortgage that’s owed them,” said Parrish.
Parrish has put the land bank together, which was approved by county commissioners and the state. The next step is for commissioners to name four members to the land bank’s board, a five-member panel that Parrish will chair. He said it will take a few more months before board members are appointed and the by-laws are written. Then the search will get underway to find funding for the land bank.
“We’ll also be looking at what we can do to take advantage of the Neighborhood Stabilization Program funding,” said Parrish, “as well as, hopefully, some local foundation support.”