There is a lot of recent reports of dramatically rising Atlanta foreclosures bank owned properties and REO's due to persons just walking away from their Atlanta homes. I think this is more than a real estate story, it is a sad commentary on a personal lack of values, judgement, commitment and character! It isn't just about them, it is the damage to society and our economy that will be left in its wake. The burden will not end when the door closes behind these folks! It is just a bad ending for them, and a very bad journey for all in the community.
There is a looming tsunami of mortgage resets taking place right now in Atlanta and across the country. The problem these days are re-sets from adjustable rate mortgages, and interest only loans whose new payment falls far beyond the reach of the ability to repay the loan. This is in stark contrast to the mortgage failures in the 1920's. The mortgages back then were balloon notes that required 50% down payments! Homeowners finally capitulated back then and walked away after they could no longer make payments, but it was job losses and layoffs that lead to the inability to pay. That is in stark contrast to today's market. To acquire Atlanta homes required no money down, no closing costs, and no commitment of the home buyers. When the going gets tough, the tough get going. It really makes you wonder if anyone was thinking? No one was reading their mortgage obligations, documents, financial disclosures, Truth in lending statements ad nauseum. Whatever happened to personal responsibility? A person that just walks away from a major obligation remains a burden for society and community long after the act. Neighborhoods decline, your neighbor loses equity, and I assume you lose your dignity for some time to come.
When you think of the current surge in a time where there is supposed to be a voluntary moratorium on new foreclosures... could you imagine if there wasn't a moratorium? So where did all the new foreclosures come from? In Atlanta Georgia foreclosures jumped from 7600 in January to a new high of over 10700 new foreclosures in Georgia in February. That is 4 to5 times higher than our current sales of homes in Atlanta. In January in the entire Atlanta metro area only 2401 homes were sold, in February it is shaping up to be less than 1500 single family homes sold. I hate to see where the new Atlanta foreclosures rates will be once the moratorium is lifted. I think it will be unfathomable even to imagine.
24 Comments on Atlanta Foreclosures - They're Just Walking Away!
MAR
12
2008
Yesterday I posted a blog on trust and its enormous value. Your situation in Atlanta is just another example of breached trust. Lenders trusted the buyers to meet their obligations and buyers trusted the lenders to be completely honest about the type of loan the buyers were getting. The real victim is the community of Atlanta who will be paying for this fiasco for a long time. My mother always said if someone got something for nothing, they would treat that something like nothing. I think this might be the case in this instance.
Kathy Fisher Your mother was a very wise and insightful person! I love that phrase "if someone got something for nothing, they would treat that something like nothing!"
One of the hardest things I struggle with is teaching my children about money. Since I never carry cash, I always use a credit card (get miles) and so my kids don't see that exchange. They think of it as not real. I think many have been raised to not think of money as real and credit something to be used to get life's extravagances rather than for those emergencies.
The market correction is a hard lesson learned, but many people need to learn the lesson.
Jim, I've been in Atlanta this week and saw that there were 100,000+ homes for sale. Wow, how will you guys ever work through that much inventory, not to mention thr foreclosures?
Melina Tomson Salem Oregon Real Estate Specialist Great insight! Money is more real! I know exactly what you are talking about. If this credit crunch gets worse. People will recognize the difference between credit and cash once more. Cash will be king!
Gary Woltal - REALTOR® Dallas Ft. Worth We've dealt with it for 2 years now, and I personally believe this year will be the absolute worse. For foreclosures may just be the begining. 52% of all loans written in GA for the last few years was 100% interst only. We had major reset last year and a lot more looming in the near future. The numbers are big enough no one beleives them. Just wait. It is an absolute sin!
About two more years to go. This one may go deeper. Real estate values to the average family are down by many Thousands of Dollars. This will hurt retiring home owners and they did absolutely nothing to deserve to lose their equity.
I haven't done my February stats yet because I don't want to look.
I just read where Gary Woltal responded to your comments by noting that this week there were 100,000 listings in Altanta. I thought the Phoenix area, where I am from (Tempe) had alot with over 55,000 properties listed in the MLS not counting FSBO or new build.
I have only been to Atlanta once but loved it! I came soon after the opening of your new Aquarium. I love looking at fish so it was a treat. And while I was there I went to Orchid Daze at your Botanical Garden which was the most unbelieveable collection of orchids I have ever seen. Your transportation is great. Phoenix is putting in a light rail which hopefully will help some of the congestion we have here.
But back to your original concern. I don't necessarily think it's a matter of trust or lack of responsibility but a matter of Ability to perform on the loans. I would like to think both sides were acting in good faith. Here some of the lenders are reducing the interest rate on the existing loan to help the borrower be able to make the payment and not walk away from the house. The banks really don't want the homes back.
As for receiving something for nothing and then treating that something like nothing - I don't necesarily agree. We all receive different kinds of gifts in life and some people truly appreciate and value what they receive. The value placed is a function of character.
Good luck to Atlanta. I have a fondness for your city and hope it isn't too terribly hurt in all this.
It's terrible to drive through a neighborhood thats just a bunch of tumble weeds. When I went back to my old neighborhood in NY about 15 yrs ago..I noticed that there were still homes vacated since I left in the 80's ...weired. I now see this on s regular basis here in FL..what a shame.
your situation in Atlanta sounds alot like Florida - do you find the same trend in the areas outside of Atlanta? I just bought a little house in Cobb County - bought it from a wholesaler. I'm going to keep that one but I'm supposed to look at another one in Powder Springs which would be a flip. Its a 3/2/2 for $75k with an ARV of $128k
In response to Wendy Smith, please be careful with the ARV given you by a wholesale. Often the ARV is not really what a wholesaler will lead you to believe.
Katharine Whiting I love this city also! However the VACANT homes in Atlanta and nationwide are telling a different story than your scenario. They harsh reality is they are just walking away! Otherwise we would not have such large volumes of foreclosures. This is the height of irresponsibility!
Wendy Smith I am not involved in your deal,but I would advise caution. There is a lot of fraud in Atlanta with investment groups to out of state purchasers. In fact we lead the nation in fraud! I had one out of state investor that believe her 6 investment homes were worth 150K while in fact they were worth 65-85K. Buyer beware!
Jim, those are some staggering numbers. We aren't near anything close to that in my area. Thanks for sharing the sites and the statistics. I didn't know the notes in the 20's were structured that way. Very interesting.
Atlanta real estate broker associate, real estate columnist for www.RealtyTimes.com, real estate speaker. Real estate marketing, Internet marketing for real estate, real estate coaching
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Yesterday I posted a blog on trust and its enormous value. Your situation in Atlanta is just another example of breached trust. Lenders trusted the buyers to meet their obligations and buyers trusted the lenders to be completely honest about the type of loan the buyers were getting. The real victim is the community of Atlanta who will be paying for this fiasco for a long time. My mother always said if someone got something for nothing, they would treat that something like nothing. I think this might be the case in this instance.
Kathy Fisher Lexington TN Realtor