Foreclosures in Atlanta are expected to surge further because of record mortgage defaults in the final quarter of 2009.
According to credit information provider TransUnion, over 9 percent of homeowners with mortgages in metro Atlanta were in default by more than two months in the October-December quarter of 2009, a six-percent increase from the same quarter in 2008.
In February this year, more than 10,300 households in the 13-county metro area were hit with foreclosure filings, a sharp 27-percent increase from January filings.
Georgia foreclosures are also expected to resurge in the coming months after slowing down in January because of rising mortgage delinquencies. TransUnion reported that 8 percent of homeowners with mortgage loans throughout Georgia were in default in the final quarter of last year, the 12th consecutive quarter that the delinquency percentage increased.
Georgia’s default percentage was the fifth-highest in the country in the October-December quarter and marked an increase from 5.3 percent in the final quarter of 2008 and far above the 3.75-percent posted in 2007.
Analysts, including Mercer University economist Roger Tutterow, said that the pace of delinquency and foreclosures in Atlanta will rise further because any recovery claimed by officials to have started in the area has not led yet to job creation.
Tutterow explained that there is always a lag between the start of economic recovery and any concrete results in the financial standing of individual households.
TransUnion researchers were encouraged by default study results in the first three quarters of 2009 because the pace of nationwide delinquency was slowing down, but the fourth quarter results doused their hopes.
Housing counselors affirmed the sharp rise in deeply troubled home owners in the fourth quarter because of job loss. In 2009, more than 78,800 mortgaged homes in the Atlanta metro area were hit with delinquency or repossession filings, representing 3.7 percent of all residential units in the area.
According to Mary Ellen Nicol, a housing counselor working with the Consumer Credit Counseling Service of Greater Atlanta, the number of properties becoming house foreclosures for sale continues to rise because of loss of income. The jobless rate in Atlanta surged in December 2009 to 10.1 percent from only 7.6 percent one year before.
To help create jobs and cut down foreclosures in Atlanta, the state government through the Department of Human Services will use $64 million in funding this spring to subsidize the salaries of workers to be hired by qualified employers.
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