Atlanta Under Dark Foreclosure Clouds

October 18th, 2007

For Atlanta the weather is bad – foreclosure clouds are threatening. Last month it took a 49% jump over last years numbers during the same time period. This is the largest month-to-month swing ever noted. There are 6,809 houses in 13 counties with a total value of $1,076,975,783 waiting for foreclosure auctions. The worst affected is Fulton county with 1,731 units facing foreclosures. Fayette and Forsyth County too saw big jumps this month. These public auctions will held on the premises of courthouses on the first Tuesday each month.

Most of those facing foreclosures are lagging behind few months in their payments. Many avoid auctions by filing bankruptcy, refinancing or directly selling the property before the auctions. The foreclosure process differs from one state to another. In Georgia it does not take much time as a judge or any other public official is not required to sign the sales.

It is the ARM’s with floating interest that is fanning the flames of foreclosures across Atlanta. They make up about half of the foreclosure notices this year. Prime mortgages, more or less, are steering clear of any blame. About one fourth of every house buyer in metropolitan regions of Atlanta has opted for sub-prime loans to purchase the house. The interest rate of the sub-prime loan is very steep and floating in comparison to the conventional loans. The latter restricts itself to those with good credit history and those who can afford a down payment. According to the national trend sub-prime loans are 10 times more likely to end up with foreclosures than the prime ones.

In this month’s foreclosure listings there were many construction loans. This points to the fact that developments could not take place. The developers were trapped into foreclosures – they could neither continue with the work and without ongoing work how could they pay off mortgage dues?

Foreclosures are closing in on victims in a viscous circle out which escape seems impossible. With too many units going into foreclosures the mortgage companies are beginning to feel a credit crunch. Money is not coming in. So they cannot loan out further money to new buyers. Without buyers the property market is falling. In a falling real estate climate the foreclosure victims cannot refinance because the units hardly have any equity left. So the primary call of the hour is market stabilization.

Via

Search images: cape coral

Share and Enjoy: These icons link to social bookmarking sites where readers can share and discover new web pages.