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Published Thursday, October 09, 2008 in Local

October foreclosures up 9%

By Jeff Bishop

The Newnan Times-Herald

Foreclosures are still up in Coweta County, with 142 appearing in today's Times-Herald legal ads section -- a 9 percent rise over October last year and the fourth-highest number of foreclosures listed in a single month this year.

However, there may be some room for optimism since this month marks the first single-digit increase over the previous year -- as opposed to the double-digit increases seen every other month this year.

This month's foreclosure listings include a $2.5 million foreclosure against Thomas Grace Commons, LLC, a $950,000 foreclosure against Newnan Senior Living II, LLC, a $1.3 million foreclosure against Southside Land Holdings, a $5 million foreclosure against Golden Gate, LLC, and large foreclosures against STM Development, LLC.

Residential foreclosures come from neighborhoods all over the county, including LaGrange Street, Greenville Street, Meadowbrook Drive, Happy Valley Circle, Welcome-Arnco Road, Gary Summers Road, Mt. Carmel Road, Roscoe Road and others.

Builders with a number of foreclosures listed this month include Olde Towne Builders Inc. (Morningside Subdivision), Bob Adams Homes Inc., and K & E Venture Equities Inc. (Fairhaven Subdivision, Phase II).

The STM Development LLC foreclosures total more than $5 million and include properties associated with the Thomas Grace developments along Andrew Bailey Road and Highway 34, including Lots 4 and 5 of Thomas Grace Lane, Thomas Grace Annex and other associated properties.

The Southside Land Holdings properties consist of about nine acres in the Sprayberry subdivision, off Sprayberry Road.

The Golden Gate LLC properties are located off Lower Fayetteville Road.

Georgia remained the sixth-worst state for foreclosures in August, but its foreclosures were down 11 percent, according to RealtyTrac's August 2008 U.S. Foreclosure Market Report. September and October figures are not yet available.

Georgia tallied 8,755 foreclosure filings -- default notices, auction sale notices and bank repossessions -- in August. This marked a 13 percent improvement over July 2008 and an 11 percent improvement over August 2007. The state's rate of foreclosures was 1 for every 442 households.

According to Associated Press, more than $153 million in newly earmarked federal funds will extend a lifeline to Georgia regions hit hardest by the home foreclosure crisis, enabling leaders from Atlanta to Savannah to acquire and redevelop foreclosed properties at risk of being abandoned. But it is unclear how much of this funding will find its way to Coweta County.

Housing and Urban Development's Neighborhood Stabilization Program will distribute $3.92 billion to all states and especially regions struggling to surmount high foreclosure rates.

The money was included in the federal Housing and Economic Recovery Act of 2008, which was signed into law in July. HUD plans a national housing summit Oct. 7-8 in Washington, D.C., as well as regional conferences to explain the program to state and local leaders.

The new program enables state and local governments to acquire land and property, demolish or rehabilitate abandoned properties, and to offer downpayment and closing cost assistance to low- and moderate-income homebuyers.

Grantees also can create "land banks," assembling, managing and ultimately disposing of vacant land to stimulate redevelopment of urban property.

"To those areas trying to recover from the effects of foreclosure and declining property values, help is on the way," HUD Secretary Steve Preston said in a news release. "Clearly, the intent is to put this money to work in communities with the highest need."

Grant amounts were determined by factoring each region's rates of foreclosures, subprime mortgages and mortgage defaults. Officials also weighed local abandonment risk.

HUD said the states receiving the most money were Florida, California, Michigan and Ohio.

The state of Georgia will receive funds totaling more than $77 million; nine other cities and counties will receive the remainder, roughly $76 million.

DeKalb County, labeled at "high" local abandonment risk amid a 6.4 percent foreclosure rate, will receive the largest grant at $18.5 million.

Atlanta will receive $12.3 million, Fulton and Gwinnett counties each will gain more than $10 million. Clayton County will receive more than $9 million. Augusta, Columbus-Muscogee and Savannah, as well as Cobb County, also will receive money.

The statewide foreclosure rate is estimated at 5.2 percent, high, according to HUD, which estimates the national foreclosure rate at 4.8 percent.

Throughout the Atlanta region, the sting of the housing market crunch is apparent both in abandoned homes and homes remaining on the market longer than usual.

"I'm seeing very much of a slowdown in my resale inventory and my foreclosure inventory," Lin Sadler-Perry, a Gwinnett County real estate agent affiliated with Century 21, told the AP. "Our showing numbers in the past three weeks are down at least 50 percent compared to what they were, say, six months ago."

The ongoing credit crunch isn't helping matters, either, as fewer and fewer potential homebuyers can now qualify for a loan.

Regional leaders have until Dec. 1 to present spending plans to HUD. Grant funds must be used within 18 months.

Last week's $700-billion rescue package for the financial system includes measures designed to stem the rising tide of foreclosures, but it may do little to help individual homeowners.

The plan provides the Treasury secretary as much as $700 billion to buy troubled mortgages, and securities tied to these mortgages, that are held by banks and other large investors. When these assets come under government control, federal officials are required to "implement a plan that seeks to maximize assistance for homeowners" and use their authority to minimize foreclosures.

Federal officials have already been encouraging lenders to modify loan terms whenever possible. Mortgage industry experts say most lenders are willing to make modest changes to payment plans to avoid the time and expense of foreclosure but are reluctant to do so if they determine that the borrower lacks the income to make even modified payments or if their losses would be too great.

But Paul Leonard, California director of the Center for Responsible Lending, a nonprofit advocacy group, thinks the $700 bailout really won't help many homeowners. He believes the only way to ensure people stay in their homes is to allow bankruptcy judges to modify or forgive loan terms in bankruptcy cases, which he said could have prevented 600,000 foreclosures. Such a measure has been opposed by mortgage lenders, who say it would discourage banks from making loans.

The federal bailout may do little to help struggling homeowners because the U.S. government will not have direct control of many of the home loans that need reworking to avoid foreclosure, economists and housing analysts say.

Under the plan, the government will buy troubled mortgages directly and rework them to the owners' benefit, or buy securities that are tied to large pools of home loans that were packaged as investments by Wall Street firms. Many industry analysts predict that the bulk of the $700 billion in the bailout will be spent on buying securities, not home loans.

However, the ownership interests in those pools of mortgages are split among dozens, sometimes hundreds, of investors, and the US government is unlikely to own a large-enough piece of a given pool of mortgages to be able to order the companies servicing the loans to change their terms. And it is also unlikely to get enough of the other security holders in the mortgage pool, or trust, as they are known, to agree to changes, say housing specialists.

Harvard law professor Howell Jackson said the federal government "probably won't have enough leverage to force change" because ownership of the mortgages is "broken up into too many pieces to reassemble."

Nearly 2 million mortgages are delinquent by 60 days or more, putting them at risk of foreclosure. Industry experts say there have been more than 900,000 foreclosures since 2007.

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