Increasing Rate of Foreclosures Upsets Atlanta

[RamboLiberal]

Source: NY Times

Despite a vibrant local economy, Atlanta homeowners are falling behind on mortgage payments and losing their homes at one of the highest rates in the nation, offering a troubling glimpse of what experts fear may be in store for other parts of the country.

The real estate slump here and elsewhere is likely to worsen, given that most of the adjustable rate mortgages written in the last three years will be reset with higher interest rates, said Christopher F. Thornberg, an economist with Beacon Economics in Los Angeles. As a result, borrowers of an estimated $800 billion in loans will be forced in the next 12 months to 18 months to make bigger monthly payments, refinance or sell their homes.

A big reason the fallout is occurring faster here is a Georgia law that permits lenders to foreclose on properties more quickly than in other states. The problems include not just people losing their homes, but also sharp declines in property values, particularly in lower-income and working-class neighborhoods.

For example, a three-bedroom house near Turner Field, where the Atlanta Braves baseball team plays, fetched a high bid late last month of $134,000 at an auction by the bank that took possession of it. Almost three years ago, the new home was bought for $330,000.



Read more: http://www.nytimes.com/2007/07/09/business/09auctions.html?hp

[tomreedtoon]

1. Sorry, but does anyone know what "schadenfreude" means?

Most of these people bought big houses for big money that they were getting from their big jobs. And they were among the biggest supporters of the Republicans.

As a person who could never afford a downpayment for a lean-to shed, I find it very hard to sympathize with these people being thrown onto the street. Especially if they bought these as "investments."

[still_one]

2. I understand your feelings, but you can be sure of one thing

the banks will not lose one cent on this

[phantom power]

9. Unfortunately, the banks just *might* lose. Big.

That's exactly the worry. That the credit bubble will take down the economy when it pops.

[Javaman]

13. The credit bubble is next and it won't be pretty...

it will make the housing bubble look like a walk in the park.

There are so many people here on DU that promote the concept that having a little debt is a good thing.

I know what they mean, but in the long run, I'd rather be a debt free homeowner than a credit holding debtor.

When the credit bubble hits and inflation shoots the value of the dollar through the ceiling, I will at least still own my home and my car.

[flvegan]

3. Oh, really.

Well, do back that bullshit assumption up with some data please.

[1932]

4. With an interest-only mortgage, the interest part is all profit to the banks.

many people got nowhere close to owning any equity at all in their homes.

[lithiumbomb]

6. is that what we're about?

Since this person bought a 330k house they must be a republican and therefore deserve to lose their home?

To bring this into some context of this area, the most likely buyer of that house wasn't an investor and it probably wasn't terribly large. Probably a young family who were trying to move into town close to their jobs to avoid the 1-2 hour commute. Sadly it seems that they paid way too much for a home and had no idea how to manage their finances or know what they could afford. And while 330k is pretty inflated, if someone got it for 130k at auction they probably got a deal unless it's trashed.

[dysfunctional press]

10. the person who bought it for $134,000 at auction is the republican.

a few curtains, a little paint, and they'll get $200k come fall.

[sendero]

11. Not everyone .....

... is guilty but on some level I agree with you.

Folks who get zero-down, interest-only or ARM mortgages fall into 2 categories: stupid beyond belief or hell-bound to buy more house than they can afford (for many possible reasons but none of them good).

Our new pollyanna consumer culture is about to take a wicked crash, and these folks are merely the front-line casualties. More are coming.

AND THEIR FOLLY IS COSTING EVERYONE, INCLUDING THOSE WHO PLAYED THE GAME STRAIGHT and now see their properly-purchased home depreciate because of all the foreclosures on the market.

So, for most of these people, excluding ONLY those who got real mortgages and then suffered a real unpredictable hardship, I feel no sympathy whatsoever.

[rmgarrette64]

16. Scahdenfreude

Just to answer your question, schadenfreude is from the German. It refers to people's delight in the problems of another, usually some one you dislike.

R. Garrett

[Doctor_J]

18. I do, and everyone who voted for * who's now in trouble brings it on

[cliss]

5. Ok, let's look at that figure.

A house was bought for $330,000 about 3 years ago.

Last month, it was sold for $134,000. That's probably more like the true price of the house, if you cut away speculation and exaggerated real estate prices.

Who got the $134,000? And who got the $330,000? The bank or mortgage company which wrote the original mortgage probably had to write off this loan as it was not recoverable.

Who lost? Obviously the poor home owner who probably walked away with nothing. But someone else also lost.

[ixion]

7. yep, the true price of the house was around 134K...

This is what I noticed about the 'boom', and why I refused to buy a house in that period. I simply could not bring myself to pay 330 for 180 worth of house. Simple as that.

[Bonobo]

8. One day there will be a modern Shay's Rebellion.

People will refuse to leave their homes and start shooting.

Most of these folks were not Pukes. They were poor people who kept taking out loans and refinancing ("Need a little cash too? Huh?") and then there loans were worth more than there home value.

Fuck you to the asshole who is feeling "schadenfreaude"

[The Backlash Cometh]

12. This is horrible.

[bleedingheart]

14. A friend of ours has a $400K+ house on an interest only loan in Atlanta

they are running their own business...but I am not sure how they make ends meet.

It is always tempting to move up in the world and live large..but it has its price and if you don't have the cash for it...you can end up screwed...

[1776Forever]

15. And guess who owns some of these loans??? You got it China!!!!!!!!!!!!!!!!!!!

We have a 2nd mortgage and the other day we remarked to our lender that we thought it was excessive for the lender to have people calling from India 4 or 5 times a day if we were a few days late on the payment and they said it was not Indian but Chinese nationals calling - China owns our loan!!!! It is going to get messy around here soon!!!! God help us!:banghead:

[DBoon]

17. If these people really had money

They would just write this off as an investment loss on their taxes.

The wealthy never ever lose their own homes

It's the people who aren't wealthy who try to buy into the idea of becoming welathy who end up losing

[Orsino]

19. "Vibrant" economy?

By definition, this is an economy that is failing these victims of foreclosure.

Executives of the lending companies are loving life, I'm sure, and might use words like "vibrant."