Phil Williams has been spending a lot more time hanging out in the lobby of a new county courthouse in Suttons Bay Township than he ever expected or wanted.

A retired Leelanau County sheriff's deputy, Willams supplements his income by conducting "sheriff’s sales" of properties whose owners have failed to make mortgage payments.

The number of people falling into that category has reached an all-time high in Leelanau County as well as many other areas of the region, state and nation.

“I’m doing a lot more of these sheriff’s sales than usual,” Williams lamented. “It’s sad. My impression is that too many people earning $12 an hour around here are trying to pay for $400,000 homes – and it just can’t be done.”

A series of newspaper advertisements published in the Enterprise are generally purchased through attorneys representing banks to announce that a mortgage foreclosure is imminent and a sheriff’s sale of the mortgaged property has been scheduled.

In most cases, Williams said, no one shows up to purchase properties offered at sheriff’s sales – conducted under state law and tradition “on the steps” of the local courthouse. If the homeowner does not redeem the property by paying off the required amount following a sheriff’s sale, usually within a six month “redemption period,” the bank assumes ownership of the home and the residents may be evicted.

Leelanau County Register of Deeds Sue Stoffel said her office has never processed so many mortgage foreclosures.

Often referred to as “sheriff deeds,” there were only six recorded in 2000. In 2007, that number jumped to 43. It was clear from first quarter statistics this year that Leelanau County may be on track to substantially exceed last year’s record, with 26 sheriff deeds recorded by the end of March.

Last year, Michigan rated fourth in the nation for mortgage foreclosures – and Leelanau County by no means led the way. Record numbers of foreclosures were seen in the Detroit area and elsewhere downstate where the recession in the auto industry resulted in layoffs across the state. The foreclosure numbers were expected to rise again this year statewide.

In neighboring Grand Traverse County – where the population is nearly four times greater than Leelanau – the numbers seem even more dire. According to Register of Deeds Peggy Haines, her office processed only 75 mortgage foreclosures in 2001. Last year, the number was 291. And by the end of last month, 101 more mortgage foreclosures had been recorded for 2008.

“It’s likely that too many people have mortgaged their homes to the max,” Haines said. “They can’t borrow any more; they have no equity and they can’t sell the house. There’s no way for us to know how much adjustable rate mortgages or ‘sub-prime’ mortgages have to do with this, but they’re probably playing a role,” Haines said.

She said that six or seven years ago, people would typically redeem their mortgages.

“Now, just one or two out of 15 or so get redeemed,” Haines said. “Most of the homes just go back to the bank.”

Mortgage foreclosures aren’t the only way cash-strapped homeowners are losing their properties.

Leelanau County treasurer Vicki Kilway said her office has seen a sharp spike in tax foreclosures in the past year. Since state law allowed counties to conduct tax foreclosure proceedings in 1999, Kilway said, Leelanau County had processed tax foreclosures on two properties – easements on vacant, unbuildable parcels, in 2006. Last year, there were no tax foreclosures.

So far this year, Kilway said, six tax foreclosures have been recorded – an unprecedented number.

The properties are slated to be sold on Aug. 1 during a public land auction being by organized the treasurers of six contiguous northwest lower Michigan counties, at the Days Inn in Manistee.

“Six is a very bothersome number – we’ve never seen anything like this before,” Kilway said. “You only have to look at the economy and the unemployment rate in Michigan to understand what’s going on. Things may not be as bad here in Leelanau County as they are elsewhere – but we’re definitely being affected.”

Meanwhile, the real estate market in Leelanau County remains “flat” and is declining slightly in some areas, according to county Equalization Department manager Pam Zientek.

A 2008 Equalization Report she presented to county commissioners last week showed that although the taxable value of properties in Leelanau County increased by 5.32-percent last year, about 2.3-percent of that was due to inflation – the increase in the national Consumer Price Index (CPI). The remainder of the increase, about 3-percent, was attributed to transfers of properties – and the “uncapping” of the taxable value that is otherwise limited by state law.

Zientek noted that figures contained in the 2008 Equalization Report are based on studies that are generally two years old.

“So, we are behind the actual market, and I expect that we will see a broader decline in next year’s report,” Zientek said.

The “equalized value” of properties in Leelanau County increased by 4.9-percent overall, but declined by 1.26-percent in Bingham Township, 1.9-percent in Cleveland Township, and less than one-percent in a portion of Traverse City located within Leelanau County.

“People still ask why their taxes go up if their property values have stayed the same or even gone down,” Zientek said. “It’s important to understand that the taxable value goes up according to the CPI no matter what. And this goes both ways,” she added. “When property values were rising much faster than the CPI, taxable values rose only by the amount of the CPI.”

The rate of inflation for consumer goods so far in 2008 appears to be substantially ahead of the CPI increase for last year – so taxable values are expected to rise next year even if property values remain flat or decrease, Zientek explained.