I usually only write one blog a month but after writing my most recent blog about the Sub-Prime Interest lock the government is proposing I decided to research more areas surrounding Atlanta to see the ratio of foreclosures by counties.

I always hear conversations about the person that just bought a 600K home for 400K. Sounds great doesn’t it? In reality it very rarely happens! In most cases the person is quoting you the asking price vs. what he paid for it. Or the best one I hear is someone saying they got a 600K home form 400K, it needs 200K but they can get it done for 100K. There’s more to these stories than you’re ever told.

I’m contacted every week by someone looking for a deal on a foreclosure. It’s understandable that everybody wants a deal on a home, but so far it’s been pretty hard for me to find plenty of foreclosure deals. I can find foreclosures but they are not deals!

However, I did find one this month. The buyer purchased this home for 225K which was about 25% less than the average home sold in the last 2 years in that subdivision. The home needs about 13K to 16K in cosmetic improvements and stripped appliances. This client has long term plans to live in the house. Thus making this a deal compared to the current market and county which was Cobb. The transaction took over 45 days from binding agreement to close!!

After doing some research I discovered why I’m not seeing all these foreclosures the media keeps talking about. I mainly work within Cobb and North Fulton County’s and these numbers tell my why I’m not seeing all those great foreclosure deals!

Below is the foreclosure rate per households in the following counties.
Cobb County - 1 in 597
Fulton County - 1 in 122 (Majority South Fulton)
Gwinnett County – 1 in 311
Paulding County - 1 in 164
Douglas County 1 in 260
Forsyth County 1 in 553
Cherokee County 1 in 396
DeKalb County 1 – 252
Rockdale County 1 in 207
Fayette County 1 in 368

So if you’re looking for a deal you might want to start in the counties with the most foreclosures. I want to make people aware that you have to do your homework when buying a foreclosed property. It’s very tricky and I recommend you hire a seasoned real estate agent to help you negotiate with the bank. It’s takes lots of patience and time to get foreclosure homes under contract and to the closing table! Banks are simply overwhelmed by foreclosure volume in general. They don’t pay any attention to the dates you want to close, etc. Be prepared to wait on all responses from the bank every step of the way. If you do your due diligence you may end up with some instant equity. If you don’t, your deal today will be a deal for someone else tomorrow. My dad used to say “figures don’t lie, liers figure”!

Call me I would love to discuss real estate opportunities!

If you have a sub-prime mortgage on your home with a escalating interest rate then you may soon get some needed help from our government. If you’ve got one of those adjustable rate mortgages, you may qualify for a rate freeze under certain conditions. Standard fixed rate mortgages will not be affected.

The bailout is really designed for homeowners who are into trouble because their mortgage payments keep going up making it impossible for them to pay their monthly payments. If you have sufficient funds or income to pay your mortgage even if your payments have gone up then you’re not eligible for the rate freeze. You have to live in your home to qualify for the rate freeze, second homes and investment properties will not qualify for this program. You have to have taken the loan out between 2005 & 2007 with rates set to increase between 2008 & July 2010. You have to have less than 3% equity. You must be current on your mortgage payments or no later than 60 days. You have to prove you can handle the locked payment but not the higher payment. Analysts estimate this will help between 240,000 to 250,000 people out. That’s a huge number of homeowners with sub-prime mortgages. And there are many more homeowners with sub-prime mortgages that will not qualify for the rate freeze. This bailout is a half fix at best! Unfortunately many of the people that this rate freeze is trying to help out will eventually end up in foreclosure. We need a plan for other with a sub prime mortgage with diffirent curcimstances.

The current Bush administration is concerned about the fallout from the housing slump. The repercussions of the high rate of foreclosures will have a series of problems for the housing industry. Ten of thousands of American could be forced from their homes. This will slow consumer spending hurting the economy overall. All of this will cause home prices to fall even more.
This bailout deal will add some stability to the housing market, but it will not stop all the problems we face in the real estate industry right now. The same day Bush announced his plan, the Mortgage Bankers Association said that foreclosures had reached a record high in the third quarter. Mortgage foreclosures hit a record .78% up from the previous high of .65%. At the same time, delinquencies for all mortgages rose to 5.59%, from 5.12% in the second quarter. So we still have more people out there that will end up in foreclosure as time moves on. As I stated in a earlier blog, we haven’t hit bottom yet.

The Atlanta real estate market has had its share of higher than normal foreclosures this year. However it hasn’t drastically affected home prices in the North Metro Atlanta area. Supply and demand has softened our home prices more than anything else so far. It’s projected that we’ll get over million more people moving to the Atlanta area by 2011. Our job growth looks good. Atlanta will fair pretty well through this real estate downturn in the long run. The national news media wants you to think all the flood gates are open and look out below. The truth is the majority of the foreclosures are happening in three states, California, Florida and Ohio. Folks in these states will have a long journey back before they can say the word equity!! Reports claim some homeowners in these states have homes that are worth 37% to 40% less than 2006. Be glad you own a home in Atlanta. We’re actually project to have a slight increase in home values this year! But certain areas of Atlanta have been hard hit.

Keep in mind this rate freeze is really going to be a problem for the mortgage industry. Investors will think twice about backing mortgage programs that have been big money makers in the past due to uncertain returns. I don’t want to see anyone lose their house in foreclosure but Wall Street and many such firms have invested in securities that back your mortgage – there also tied into pension funds as well as mutual funds. Their clients include all sorts of people like you, teachers, fireman, policemen, etc. So……some people will have lower payments which are good……but other people will not have the kind of return on their investments which is bad for their retirement. We need much more of a fix to help the housing industry.

I’ve don’t believe the average person has any idea how many people are involved in the home buying process and the supply chain involved. The current mortgage problems are undermining what made America great! Long term financing!!