Mortgage delinquency rate rises in Georgia

By Paul Donsky

The Atlanta Journal-Constitution

The percentage of Georgia mortgage-holders late on their payments continues to rise, reaching 8 percent in the fourth quarter of 2009, the fifth-highest delinquency rate in the nation, according to a report issued Tuesday by credit bureau TransUnion.

Nevada had the highest delinquency rate, at 16 percent, followed by Florida, Arizona and California. The national average was 6.89 percent.

Georgia's late-payment rate has risen for 12 straight quarters. The 8 percent figure compares with 5.3 percent a year earlier and 3.75 percent in 2007. The rate was even higher in metro Atlanta.

Economists say they’re not surprised by the trend, as the nascent economic recovery has not yet led to job creation needed to turn around the long-troubled housing sector.

“As you work your way out of a recession and into a recovery there will be a lag between when the economy starts to turn up and when individual households start to see it in terms of the their financial standing,” said Roger Tutterow, a Mercer University economist.

Tutterow said Georgia’s delinquency will probably rise even higher.

“Though the recession is likely over, we’re not creating jobs yet at the national or local level,” he said.

The numbers are especially gloomy for metro Atlanta, which has suffered one of the nation’s worst housing boom-and-bust cycles. More than 9 percent of Atlanta mortgage holders were at least 60 days late on their payments in the fourth quarter of 2009, up from 6 percent a year earlier.

Foreclosure notices in the 13-county region hit 10,357 in February, up 27 percent from January.

The rate at which late mortgage payments were rising, both nationally and locally, had slowed during the first nine months of 2009, offering some hope that the housing crisis had peaked, said FJ Guarrera, vice president of TransUnion’s financial services business unit.

The rate shot up in the fourth quarter, a troubling sign but by itself not enough to suggest a new pattern, Guarrera said.

“We hope there’s some sort of anomaly at play,” he said in an interview.

But counselors who work with distressed home owners in Atlanta say they’ve seen a surge of cases over the last six months or so from families reeling from lost jobs.

“The reason they are calling is they just don’t have the kind of income coming in that they had before, which means they are falling behind on their mortgage,” said Mary Ellen Nicol, a certified housing counselor with the Consumer Credit Counseling Service of Greater Atlanta.