Atlanta climbs on late-loan list

Nearly 17 percent of real estate construction loans in metro Atlanta were delinquent at the end of last year, a new report shows.

Atlanta’s delinquency rate has risen steadily the past two years and is now the seventh worst in the nation, according to Foresight Analytics, an Oakland, Calif., research company.

Just two years ago, fewer than 2 percent of metro Atlanta’s construction loans were late. During the housing boom, many metro Atlanta banks reaped huge profits by lending heavily in the real estate market. But loans began to go bad after the market turned, leaving builders and developers with thousands of homes and lots they couldn’t sell.

The study examined construction lending in the nation’s largest 100 metro areas. It’s a broad category that includes loans to acquire and develop land and to build single-family homes and commercial property such as offices and retail.

Atlanta had about $19 billion in such loans outstanding as of the fourth quarter, with $3.2 billion considered delinquent —- that is, at least 30 days past due, said Matthew Anderson, a principal with Foresight Analytics. But 75 percent of Atlanta late loans were the most troubled kind —- so behind that the bank had given up hope of collecting any interest.

Joe Brannen, president of the Georgia Bankers Association, said the numbers were unsurprising given the deteriorating economy. He defended the industry’s practices, saying demand for housing-related loans was strong earlier this decade as metro Atlanta’s population boomed.

“It is actually encouraging that we’re not higher on the list,” he wrote in an e-mail.

FALLING BEHIND

Delinquency rates on construction and land loans:

Metro areas………………….Q4/08….Q4/07

Miami……………………….21.1% ….6.5%

Tacoma, Wash…………………20.0% ….3.5%

Seattle, Wash. ………………19.6% ….3.3%

Warren-Farmington Hills, Mich. ..18.1%….11.1%

Memphis……………………..18.1% ….5.7%

Cleveland……………………17.4%….12.8%

Atlanta……………………..16.6% ….7.9%

Bakersfield, Calif……………16.4% ….2.3%

Portland, Ore. ………………16.1% ….4.7%

Fort Lauderdale………………15.8% ….7.8%

Source: Foresight Analytics, FDIC