Foreclosures hurt neighbors

The home mortgage crisis is gathering steam across Georgia as the state’s economic woes deepen.

One of eight Georgia homeowners were either behind on their payments or in foreclosure in the fourth quarter, according to a survey released Thursday by the Mortgage Bankers Association. The 223,000 Georgia homeowners delinquent or in foreclosure marked a 16 percent increase from the third quarter.

Georgia reported one of the biggest increases in loans at least 90 days late as the state’s jobless rate has surged.

The rising tide of foreclosures is taking a toll on entire neighborhoods, causing home values to plunge and creating a pool of vacant homes that breed crime, said John O’Callaghan, president of the Atlanta Neighborhood Development Partnership, an affordable housing advocacy group.

The hardest-hit parts of metro Atlanta include the city of Atlanta, south Fulton County, south and central DeKalb County and Clayton County, he said.

“Clearly, [foreclosures] are a tragedy for the individual homeowner who can’t live in their house, but it’s also a tragedy for the entire community,” O’Callaghan said.

Nationwide, the states that have seen the sharpest drop in home prices continue to report the highest delinquency rates, including California, Florida, Nevada and Arizona.

But the biggest increases in loans at least 90 days late occurred in Georgia and four other states, “signs of the spreading impact of the recession,” said Jay Brinkmann, chief economist at the Mortgage Bankers Association.

Not surprisingly, homeowners having the most trouble in Georgia are those with less-than-stellar credit who took out subprime mortgages. More than 35 percent of these homeowners were either delinquent or in foreclosure in the fourth quarter, the survey found, slightly below the national average.

Delinquency rates for prime mortgages are rising nationwide as higher-income workers lose jobs and income, said Brinkmann.

Metro Atlanta’s unemployment rate climbed to 8.7 percent in January, up 3.5 points from the same month of 2008, according to the state Labor Department.

 Associated Press 
DISTRESSED MORTGAGES RISE 
Americans with home loans past due or in foreclosure rose 20 percent at the end of 2008 —- the seventh consecutive quarterly increase.   

QUARTERLY TOTAL 
Graph tracks total home loans past due or in foreclosure each quarter from '04 through '08. Fourth quarter '08: 11.93%

Home loans past due or in foreclosure, not seasonally adjusted  
FOURTH QUARTER 
Map of U.S. shows states color coded to indicate the percentage of Home loans past due or in foreclosure, using this scale: 
Less than 5 percent 
Between 5 and 10 percent
Between 10 and 15 percent
More than 15 percent

Source: Mortgage Bankers Association