Georgia Foreclosures Soared In 2007

January 30th, 2008

According to reliable sources foreclosures rose by as much as 31% from 2006 in Georgia. About 1% of its householders are in some stage of foreclosure. It is a grim picture. Across the country Georgia ranked 7^th in foreclosure related matters – default and auction notices as well as bank repossessions with the number touching 99,578 for the previous year. It rose by 118.4% from 2005. The rate of foreclosure in the state was 1.6% during 2007.

The statistics for the nation was also grim – 2,203,295 foreclosure filings on 1,285,873 properties. It was an increase of 75% from 2006. More than 1% of the households in US are in some stage of foreclosure – that is an increase of 0.58% over the previous year.

In December the increase was by 7% over the previous month – this being the fifth consecutive month of rise. More than 200,000 filings were listed making this fourth quarter the highest record holder since records have been released from 2005. Thus 2007 has seen foreclosures cross the 2 million mark. Actual filings were up by 75% but the numbers of those in some stage of foreclosure rose by 79%. It meant some units had just entered the foreclosure zone and would complete the run in 2008 unless the lenders in tandem with the government did something drastic.

The accusing finger is pointed from all sides to the sub-prime mortgage that was peddled to gullible borrowers. The agents were lured by high commissions and the lenders by investment. The prime mortgage was available only to those with bonafide income. The amount would be in relation to income and consequently to the value of the house. These constraints kept many out of the purview of prime mortgages although the latter had low interest and long repayment terms. The sub-prime market had initial teaser rates hardly requiring any down payment. Income was not checked and the value of properties increased at random so as to quickly get sanction for heavy amount of loan. All that was required to avail of these loans was a pulse! But after two years when interests began to rise and monthly payments started including the repayment amount, the borrowers found it impossible to pull along. Thousands failed and foreclosures resulted. This was also coupled with unemployment, divorces and rising medical costs. All combined to bring down the socio-economic structure of the country.