Metro Atlanta foreclosure notices dropped 8 percent compared with the first half of last year, and fewer people are late on first-mortgage payments, but it is too early to say whether the region has seen the bottom of the real estate crisis.
June's count was the lowest in two and a half years at 7,374 and marked the fourth month in a row with declines compared to a year ago.
"It's still ridiculously high, but something has gotten better," said Barry Bramlett, president of Kennesaw-based Equity Depot, which keeps the foreclosure count in 13 metro Atlanta counties. June's number was four and a half times the average number of monthly notices in 2001.
Foreclosures affect not just the homeowners and banks involved, but the other property owners whose home values take a hit when foreclosures depress the prices in their area.
Little upticks in the economy hint at hope and that fewer people are in financial trouble:
- June's foreclosure notices bring 2011's six-month total to 56,429, which is lower than the 61,524 the region showed at this time last year.
- Bramlett said about 65 percent of the foreclosures have been listed before, meaning there are fewer new foreclosures.
- Fewer people are turning to Atlanta's CredAbility consumer counseling agency for help -- one reason it gave for laying off 70 people last week.
- Wells Fargo told The Atlanta Journal-Constitution that the percentage of timely payments for its 230,000 local customers has moved from 90 percent in late 2009 to 93 percent now, meaning about 7,000 more homeowners in metro Atlanta are now on time.
- Numbers from Equifax, the credit monitoring company, show that homeowners 30 days past due on first mortgages dropped from 8.55 percent in May 2010 to 7.01 percent last month. Its numbers also say the value of severely delinquent mortgages in the U.S. have fallen from near $10 billion in 2009 to less than $8 billion.
John Duff of Mableton was in danger of losing his house in 2010 after more than a year of fruitless negotiations with his lender.
"We were at our wits' end," Duff said.
His income as a carpenter deflated with the bursting housing bubble. Twice-monthly calls to his lender in attempts to get his loan modified always ended with no decision. Only after getting CredAbility involved late last year did the dam finally break. In September, his lender modified the loan by dropping his interest rate and cutting his monthly payment nearly in half. With a new job doing electrical work in cellphone towers, Duff has not missed a payment.
Tom Smith, a finance professor at Emory's Goizueta Business School, said there is probably a mix of reasons that foreclosure rates have dropped, one of which reflects on Duff's experience.
The pool of homes in danger of foreclosure is being sifted out by lenders over time, Smith said. They will finally separate the salvageable loans from the bad ones and make a deal or take a loss.
"The pool of homes they can foreclose on is getting smaller and smaller," he said.
"That has been going on for about three years now. Eventually, we are going to see the number of foreclosures going down," Smith said.
But have we reached that tipping point? Too early to say, Smith thinks, but others believe there is more bad news to come.
Alan J. Ziobrowski, an associate real estate professor at Georgia State University's J. Mack Robinson College of Business, believes the drop in foreclosures is caused by lenders taking a breather while they work out the mess that cropped up after the discovery that banks were not reading documents or carrying out all due diligence before proceeding with foreclosures.
"Right now, the government is putting a lot of pressure on [banks] to clean up their act with how they implement foreclosures," Ziobrowski said. "And once they get those paperwork issues resolved, I think there will be more foreclosures again."
A way to get help
Georgia homeowners behind on a mortgage or at risk of foreclosure can get free help, counseling and possibly a modified loan at face-to-face meetings at the Georgia International Convention Center in College Park this week.
The event is organized by a consortium of lenders and government agencies.
The doors to the center at 2000 Convention Center Concourse in College Park are open from 11 a.m. to 7:30 p.m. Friday and from 9 a.m. to 3 p.m. Saturday.
For more information: www.hopenow.com/index.php
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