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How the Federal Reserves 6th District is Handling Distressed Loans

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Services for Real Estate Pros

The Federal Reserve Dealing with Distressed Loans

According to the Federal Reserve Bank of Atlanta, among residential homeowners in sixth district of the Federal Reserve, which include Tennessee, Louisiana, Mississippi, Alabama, Georgia and Florida. The percent of the distressed first-lien subprime loans dropped in the last third from a year ago. It was the loans that were distressed for over 90 days that had the most drastic plunge.

It was Georgia who dropped from 54 percent to 36 percent and had the most drastic annual decline of the states. States to follow went Tennessee, Florida, Alabama and Mississippi tied with Louisiana for last at only a 5 point drop.

It was in Georgia they had help with dealing with defaults and other financial problems that borrowers where facing. The state had been helped by the Hardest Hit Fund and benefited from over $339 million. The Neighborhood Stabilization Fund also contributed to 7 jurisdictions in the state making the total from that fund out to be $91.2 million. Additionally, $97 million more was contributed to help Georgia stabilize, where large amounts of foreclosures happen in groups, in areas around the state.

Even though with these numbers on the rise and donations to contribute it doesn’t mean the state is fixed. The Obama administration says that the home preservation programs have save over 135k Atlanta homes from foreclosure, it doesn’t change the high percent of distressed home mortgages, underwater mortgages, and REOs with the lowest prices recorded. The Housing scorecard from the administration claims that with the distressed home loans around Atlanta that are bank-owned, foreclosing, or delinquent is higher than all the national average and has been this way from the middle of  the year 2000.

According to Atlanta Fed’s report, Florida’s decline showed to be the 3rd lowest decline, but continues to be on the top of the highest amount of distressed first-lien subprime loans in the Federal Reserve. At the close of the 3rd quarter, the amount of distressed loans came to 53 percent, which is 11 points less than the year prior.

The percent of these first-lien prime loans remained constant in all other states excluding Florida and Georgia with their small declines.

This information covers around 82 percent of the residential mortgages that are active in the Federal Reserve. All sources from the Atlanta Fed’s report are based off of the information provided by the Lender Processing Services (LPS:18.81 -2.64%)

For more information or advice, contact a short sale specialist today! 1-877-737-4903

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