Mackinac County ranks 79th of 83 counties in the state for its percentage of foreclosures. Seventyeight counties are in worse shape, by that measurement. The 27 foreclosures here last year, although low by state levels, are considered high for this area. Foreclosures are tied to the poor economy, job loss, and shaky mortgages, and there were 27 in Mackinac County last year.

"You know that it's a lot, but you don't realize that 27 parcels of property, potentially a family's home, have been foreclosed on in Mackinac County," said Mackinac County Sheriff Scott Strait. "That's horrible that this is happening. I'm hopeful that this trend reverses this year."

Statewide, 78 counties out of Michigan's 83 had far higher percentages of mortgage defaults, but the trend is significant, nevertheless.

"I would guess that before 2008 and 2009, if we actually had four or five foreclosure sales for an entire year, that would have been high," Sheriff Strait said. "They've jumped dramatically."

The Sheriff's Office posts foreclosure notices and conducts the sale of property in foreclosure. Until last year, there were so few, the department had no reason to maintain statistics on them.

"We're starting to track them now," said Mr. Strait, and his office is noticing a leveling off over the last four months.

There were 59 foreclosure cases last year that resulted in the 27 foreclosures.

For the Sheriff's Office, the process begins when it is notified by the creditor that a property is in foreclosure. The sheriff will post the notice at the office and at the county building and the creditors also publish a notice in The St. Ignace News. A last minute effort usually is made by the property owner to work with the creditor to try to make some arrangement for payment. If an agreement can be reached, the mortgage holder will cancel the sale for one week, which is an adjournment. The 59 cases last year generated 449 adjournments.

Locally, the foreclosures have had little impact on assessed values used for taxation, but they have driven down property values by about 12% in 2009.

"This area has not seen the decreases in property values that we've seen nationwide or in other areas of the state," said Jennifer McGraw of Moran Township, a state-certified appraiser. "We've seen decreases, though, and I'm surprised to find out very often that people don't realize that we've seen decreases, too."

Falling property values are the result of a number of situations, she said. Values can be tied to the pressure of some property owners to drop prices in an effort to sell more quickly.

Also contributing to declining prices of homes, she said, is the way foreclosures are managed by mortgage holders. On average, lenders are dropping the listing price of a foreclosed home about 14% every 65 days it remains on the market.

According to Mrs. McGraw, the value of off-water property in St. Ignace dropped about 12% in 2008 and then again by 12% in 2009 .

As for assessment values, Mackinac County Equalization Director Jim Fenlon said, "It's really hard to use foreclosures as a guide for decreasing property values because there is so much that goes into them as far as setting that value at the time of sale," he said. "We compare our studies to their assessments. We study their values and create an equalization factor based on those studies. What typically does not happen is when a property goes into foreclosure, the assessor does not go right out and look at the condition of that property. Usually when someone is losing a property, they will quit it."

Typically, he said, his department does not take that into consideration when it performs appraisals of sales studies. Foreclosure sale prices are not necessarily an indicator of the true market value of that property as assessed or at the time of sale. What also has to be taken into consideration is a lot of lending institutions dump the property as soon as they get it for 40¢ to 50¢ on the dollar just to get some of their mortgage money back. The foreclosed property is not necessarily exposed to the true market, either. There are people following lenders around, he said, buying up foreclosed properties as investments. Many times, he said, the property is not even listed with a realtor.

The Equalization Department follows strict state guidelines when studying assessed values, said Mr. Fenlon.

If the foreclosed property has some conditions on it, the typical buyer may not be able to get financing. The condition could be the result of the former owner, who may have moved out in winter and turned the heat off, causing damage to the home, he said for example. Those condition problems might not be reflected in the assessment.

"There's a lot of factors that come into play with whether or not that was a good, arms-length sale," he said, "so, therefore, unless we can verify that all these criteria are met for studying that assessed value, we can't use it as an indicator for what the rest of that residential class is doing."

Some people are buying foreclosures seeking a good deal, said Mr. Fenlon, while the regular properties that can be listed and marketed to the typical buyer aren't moving. Those people are buying the foreclosures instead of buying the more expensive property, which also impacts pricing. Still other people are either dropping their prices or sitting on them, waiting for the market to come back.

"We're seeing fewer sales and we're seeing a few dropped prices, but the foreclosures aren't really guiding our market yet," he said.

His department is seeing the most foreclosures in the county around Curtis, Cedarville, and in St. Ignace.

Foreclosures may not necessarily affect the tax assessments. When people start dumping property at low prices, then they will affect the values. That would show as an indicator of the whole class going down.

"We have seen some of that," Mr. Fenlon said, "but people are sitting on properties rather than getting rid of them."

The Equalization Department is in the process of preparing standard equalized values of properties, said Mr. Fenlon, and that will be completed in a few weeks.

Until recently, foreclosures have been rare on Mackinac Island, said Bill Borst, the owner of Mackinac Island Realty since 1984. The economy, he said, really has dictated what is happening with foreclosures, although the Island is unique, not truly comparable to most areas. Buyers and owners usually are not in a financial bind, but occasionally that happens.

"In the last two or three years is the first time I really experienced foreclosure properties," he said. "There isn't an abundance of foreclosures. I don't think at any one time I've seen that we've had any more than three or four properties in foreclosure. They are not all homes. Some of them are vacant land."

A recent foreclosure on Mackinac Island was one of the few permanent home foreclosures Cheryl Schlehuber has seen. She is the owner of Mackinac Properties in St. Ignace. Most foreclosures have been second homes.

"There were 50 calls on it and there were multiple offers on it immediately," she said of the Island property. "It didn't end up in a bidding war, but it did sell for the full price it was listed at because nobody expects a place on Mackinac Island to go on foreclosure."

Her office is seeing a few foreclosures, but they are just a minute part of the market. She estimates it to be about 2% of her business. People are looking for a home and not foreclosures, she said.

"The Pure Michigan campaign actually did some good public relations work for Michigan, and not just for the vacation business, but to give people an idea of what's in Michigan," said Mrs. Schlehuber.

Another draw is the new Mackinac Straits Hospital.

"We know that 2010 is still going to be a little bit tough," she said, "but I just think that the hospital is the big player. There will be offspring businesses because of the hospital."

Also poised to help the real estate market this spring is the first-time home buyer tax credit, which recently was extended to the end of June. If someone has not owned a home in three years then they can qualify to get a 10% credit back or up to $8,000. Also, if someone has a home and they want to move, they can buy a home and get a $6,500 tax credit, if a contract is written by April 30, and the home sale closes by June 30.

Local Help Is Available

Housing Opportunities Made Equal (HOME) of Mackinac County now offers help to residents facing possible foreclosure, including counseling services. The agency works with people with incomes between $15,000 and $55,000 and can be reached in St. Ignace at 643-6239 or by e-mail at home@lighthouse.net. A national program called HOPE NOW offers remedies to those whose income exceeds $55,000 and can be reached at the HOPE Hotline at 1- 888-995-4673 or www. hopenow. com.