Wisconsin Mortgage Foreclosures Fall to 17-year Low

Amid a better jobs climate, tougher lending standards and rising home prices, mortgage foreclosure filings in Wisconsin have fallen to their lowest level in at least 17 years.

In the first half of 2017, there were 4,132 foreclosures filed with courts in the state, according to the University of Wisconsin-Whitewater’s Fiscal and Economic Research Center. That is down about 12% from 4,712 during the first six months of last year, and below the 4,740 foreclosure filings recorded in 2001 — as far back as the UW-Whitewater data goes.

The 2017 total is less a third of the number of foreclosure cases seen from January through June in 2009, the year with the worst start in Wisconsin during the foreclosure crisis.

The improved employment environment has made it more likely that borrowers will stay current with monthly house payments, but lenders are more careful now about who gets a mortgage to begin with, said Russell Kashian, a UW-Whitewater economics professor who runs the university’s research center.

“I think prior to the financial crisis the economy was doing very well, but there were a lot people that were on the bubble, that were on the precipice. I don’t think we’re making those loans today,” Kashian said.

Michael Zimmerman, senior vice president for investor relations for Milwaukee-based mortgage insurer MGIC Investment Corp., said that since about 2009, credit scores for mortgage borrowers have been “significantly higher” than before the recession and housing crash. Mortgage insurers cover part of the cost for lenders if a loan isn’t repaid.

“Stronger credit profiles since 2009, rising home values pretty much across the country, and a comparatively strong labor market with increasing wages just put borrowers in a better position to maintain the payment,”  ZImmerman said. “And if they do get into trouble, they can sell the property.”