Atlanta Mortgage Woes Setting the Tone For Housing Market?

Eager to feel and show elevated status, many homeowners in the last four years or so took out risky mortgages with lower initial payments in order to buy fresh, big new houses.

But, as they say, what goes around comes back around, and these ARMs are starting to see home loan rate resets, a phenomenon that is only likely to increase in the coming years.

Homeowners who bit more than they could chew are already feeling the hurt in the Atlanta housing market, and it is expected the problem will get worse this year and into 2008.

Now only did the bad credit mortgage borrowing market start bottoming out late last year and into 2007 (companies going insolvent, homeowners being foreclosed), now the ARM mess is starting to rear its ugly head.

Will homeowners decide to pay those newer, higher Georgia mortgage payments or sell their homes?

Regardless, hard lessons are being learned by Atlanta mortgage holders whose decisions were based more on emotion rather than fiscal logic.

In Atlanta, Georgia mortgage foreclosures are occurring at ever-increasing rates and auctioneers are most likely seeing business flourish as a result.

It helps (or hurts) that Georgia home mortgage foreclosures can happen much quicker than proceedings other states, fueling the process.

According to The New York Times, 6 percent of all mortgages in June were more than 30 days past due, the fourth-highest rate in the nation.

The highest? Mississippi, Louisiana and Michigan mortgage troubles.

The old saying of “prepare for the worst” could not be more fitting for the mortgage industry, as slicing up 30 percent or so of income just for a mortgage loan payment - along with an ARM or interest-only loan - just sets most people up for failure in the first place.

We all want more than we can afford, but it can come back to hit us hard later. With $800 billion in mortgage loans forced to have bigger and bigger monthly payments in the next 12 to 18 months, we may have not seen anything yet.

Continue reading in the New York Times …