According to RealtyTrac, Michigan's foreclosed homes rate increased by 10 percent for the first two months of 2009. It has been noted that the statewide foreclosure activity in the second half of 2008 was relatively flat.

The slight rise in home market sales in Michigan has been correlated to the increase in foreclosure fillings.

Daren Bloomquist of RealtyTrac suggested that mortgage lenders may find an opportunity on the increasing sales of foreclosed homes in the state. Data showed that one out of 360 homes in Michigan was in foreclosure proceedings in February of this year.

To help homeowners of distressed properties, the Grand Haven city of Michigan has established a foreclosed homes prevention program.

The city's program, recognized by the U.S. Department of Housing and Urban Development (HUD), has received a grant to provide about 1,200 counseling sessions to help distressed homeowners avoid losing their properties to foreclosures. The grant is made possible under the National Foreclosure Mitigation Counseling Program.

The number of counseling services planned for 2009 is way higher than the 68 foreclosure prevention sessions conducted by the city last year.

According to Char Seise, city neighborhood development coordinator, it is important that Grand Haven residents know that there is an available foreclosed homes prevention service that they could turn to in this time of housing crisis.

One foreclosure prevention option is short sale, a program that allows mortgage lenders to provide discounts to loan principals because of homeowners? financial instability.

Meanwhile, President Barack Obama's $75 billion home recovery plan is designed to encourage mortgage lenders to modify loans, with a bonus of $1,000 for every successful deal.

Pat McGinnis, city manager of Grand Haven, explained that the city decided to expand its program to reduce the number of foreclosure properties in the city because it believes that strengthening the housing market is one way to stabilize the local economy.

The HUD program allows Seise's office staff to bypass banks, investor and collections agents in helping troubled homeowners avoid foreclosure.

Seise said that the foreclosure prevention effort does not indicate that distressed homeowners will keep their homes. However, she explained that by avoiding foreclosures, homeowners may avoid lawsuits and fines.

She pointed out that foreclosures can only happen if people would do absolutely nothing about the problem.