Foreclosures down for month, up for year

By Michelle E. Shaw

The Atlanta Journal-Constitution

Metro Atlanta foreclosure notices declined this month from September's peak, but they were still up 50 percent from October 2008.

More than 9,500 foreclosure notices were published for October, a 22 percent decrease from September's 12,318,  according to Alpharetta-based Equity Depot.

Such monthly variations aren't unusual. The real story is the total for the year. With October's filings included, the 13-county metro area has had 97,339 notices for 2009, already easily eclipsing the 79,484 notices for all of 2008.

“In the coming months we will continue to see variations, increases and decreases,” said Frank S. Alexander, an Emory University law professor and expert on Georgia's foreclosure law. “But it is my hope and expectation that the aggregate number of foreclosures has peaked, which will be some indication of stabilization in the marketplace."

Alexander noted that notices do not mean a home will be auctioned, as owners may make last-minute payment arrangements with lenders. Moreover, in Georgia the foreclosure process can be started and stopped multiple times with little cost to the lender, he said.

“In comparison to most states in the country, these numbers are going to more grossly overstate the actual foreclosures.”

Gwinnett leads the region for October with 2,063 notices. Fulton is next with 1,900, followed by DeKalb with 1,490 and Cobb with,1049, according to the Equity Depot report. Fulton leads year-to-date with 20,531, followed by Gwinnett with 19,195; DeKalb with 14,780 and Cobb with 10,674.

In Georgia foreclosure notices must run for four consecutive weeks prior to the auction, which is held on the second Tuesday of each month.

September's notices jumped sharply from August. But at least once a quarter the data spikes due to an “extra week” on the calendar because of when the second Tuesday falls, said, said Barry Bramlett, chief executive at Equity Depot, who has compiled foreclosure data for 20 years. That anomaly may explain the increase in September over August.

Moratoriums on foreclosures and loan modification programs can have an effect either way, he said. When banks hold off on foreclosures and when modifications are approved fewer homes could be in the mix in a given month. But if the modifications don't work out and when banks resume foreclosure activities, numbers increase.

For instance, there were likely few if any Wells Fargo mortgages in the greater Atlanta area published this month because the bank has issued a local moratorium on foreclosures. When proceedings begin again, there could be an unusually high number of notices from that lender in November because arrangements were not reached for homes that might have fallen in the October publication cycle.

What to expect for November, however, is anybody’s guess, Bramlett said.

“If it runs like it normally does next month could be a slight increase, but we really don’t know,” he said. “But we’re still seeing unemployment going up and we’re not seeing property values go up at any appreciable rate, so we don’t really expect the foreclosure picture to change right now.”