Georgia Mortgage Foreclosures Rising in Atlanta

Teresa Weathers may have bitten off more of the American Dream than she can afford. Like an increasing number of homeowners, she’s facing foreclosure.

Recently laid off from her job as a Georgia home loan processor and unable to find more work, the 39-year-old Clayton County resident is two months behind on the $1,345 monthly mortgage on her $125,000 four-bed townhouse.

Foreclosures are particularly startling in the areas south of Atlanta. Nearly 1 out in 20 homes in Clayton County is in foreclosure, the highest ratio in the region.

And Clayton has the second-highest percentage of subprime, or bad credit home loans of any county in the nation.

Subprime loans are where homeowners pay above average mortgage rates, something Atlanta Regional Commission planner Jim Skinner said often results in people “getting somebody into more of a house than they can reasonably afford.”

The report also found Henry County has the highest percentage increase in foreclosures throughout the Atlanta housing market, jumping by 327 percent from 2001 to 2006.

Another Southside county, Fayette, had the highest percentage increase during the past 12 months — 36 percent.

ARC officials discussed the findings with metro area planning and public housing officials at a forum Wednesday at their headquarters in Atlanta.

“Those statistics shocked us,” said Henry County Commission Chairman Jason Harper.

Last year nationally, only metro Detroit had a higher percentage of homes in foreclosure than the Atlanta region, according to a report released in April by the federal government.

Between 2000 and 2006, there were 205,450 home mortgage foreclosures in the 10-county area studied by the ARC, a 200 percent increase, about 2.7 percent of all homes.

Planners, growth experts and credit consultants believe the foreclosure rise is due to bad credit mortgages, layoffs and a lack of affordable housing.

Another problem, they say, is many homeowners don’t try to stop foreclosure until they are several months behind in their mortgage loan payments.

“They don’t know how or are too proud to ask [for help],” said Beechie Yates, comptroller for Clayton County Community Services, which works with homeowners facing foreclosure.

ARC officials caution that the rising foreclosure rate has occurred during a housing boom in the Atlanta region.

Despite the foreclosure problems, development continues to take place up in the suburbs, in places such as McDonough and Marietta. About 125 new homes a day are built in the Atlanta area.

“It’s not that surprising there’s a number of foreclosures due to the [aggressive] lending market we have,” said Mike Carnathan, who wrote the ARC report.

Steve Cash, director of the Henry Council for Quality Growth, said in Henry that county commissioners have demanded builders use costlier construction materials, which he believes drives up housing prices.

“Housing affordability is an extinct animal in Henry County,” said Cash, a former state representative.

Harper called Cash’s comments untrue. A 2006 Atlanta Journal-Constitution survey of housing trends found Henry had the third-lowest median home sales price, $145,000, of the 10 counties studied in the ARC report.

Harper says there’s little local governments can do about the bad credit home loans, aside from discouraging people from applying for them. An effort backed by Harper to limit new construction failed this week.

Weathers, who moved from South Florida in January, has sought help from the county’s Community Services office.

“I’ve been trying to grab at straws to find income, but I can’t do it,” Weathers said at the office last Friday.

On Wednesday, she pondered her prospects as gospel music played softly in her sparsely furnished home. A woman with strong Christian convictions, Weathers believed she would quickly find another job in the mortgage industry. Weathers, unemployed since March, got two job offers, but they paid less than half what she made in Florida, she said.

Last Friday, Weathers got $700 from Clayton County Community Services to help pay her troubled home mortgage.

She is asking friends and family for money to pay the remainder of her Georgia mortgage while looking for work and remains optimistic.

“I have to laugh to keep from crying,” she said.

SOURCE: Atlanta Journal-Constitution