Change in the Air: Atlanta Foreclosure Rates Drop in August

Notices Fall to Four-Year Low

Many Atlanta area homeowners received encouraging news in August. Notices for home foreclosures dropped from 9,317 in July to 6,426. The reduction is especially nice for homeowners after a May report revealed that Georgia had the highest foreclosure rate in the nation. The new numbers bring Atlanta's foreclosure numbers to the lowest numbers it has seen since 2008.

So what is behind the sudden drop in foreclosures? A lawsuit as it turns out. In July, the Georgia Court of Appeals reversed a lower court's summary judgment ruling, stating that foreclosure notices must clearly identify who owns the mortgage or who is acting as the foreclosing bank's agent. In addition, the Atlanta Journal Constitution reported that these documents are required to offer the name and contact information of parties who can modify the existing loan, approve a short sale or offer some other form of relief.

Attorneys handling foreclosures on behalf of mortgage companies have been quickly scurrying to make sure their documents are in line with the court's decision. To make sure they do not run afoul of the standard, many attorneys have slowed down their processing.

While the reprieve is welcome to many, it may not last. Once firms have checked through their open files to confirm they are in compliance, foreclosure numbers are likely to pick up again. How much they rise is largely dependent on the economy.

By and large, the greatest number of people who are struggling to make their monthly mortgage payments are people who are either out of work or do not have sufficient income to make ends meet. Unemployment numbers are still rising in Atlanta, reaching 9.3 percent in July.

An overall review of financial distress by CredAbility found only modest improvements for people in Atlanta from a year ago. This year the agency, which looks at housing, credit, budget management, employment and overall net worth, rated Atlanta at 66.4 out of a possible 100. Anything below 70 is deemed to be financially distressed. Atlanta's rating was 64.9 last year.

Empowering Options for Homeowners

People who are having a hard time keeping up with their house payments have a number of options, including bankruptcy. Even people who want to sell a home on short-sale or obtain a loan modification should take the time to get educated about bankruptcy. Bankruptcy has many advantages that could ultimately put people in a better position than they would be with either loan modifications or short-sales. Bankruptcy may ultimately be the best means of stopping foreclosure.

Chapter 13 bankruptcy offers the immediate advantage of helping delinquent homeowners catch up on their mortgage payments while protecting them from foreclosure. This can be a critical advantage for homeowners who became delinquent while attempting to secure a loan modification only to be denied.

Individuals with more than one mortgage on their home can sometimes have the second mortgage stripped using Chapter 13 bankruptcy provided the secondary mortgage is completely unsecured. Lien-stripping can be just the help that is needed to get a family back on track financially.

Every situation is unique and sometimes Chapter 13 bankruptcy is not the best option for people. Chapter 7 bankruptcy can still be helpful. By getting rid of unsecured debts, such as medical bills, credit card debts or unsecured loans, individuals are often able to get the fresh start they need to keep afloat with their mortgage payments.

Trying to stop foreclosure can be scary. It often feels like many forces are conspiring to push people out of their homes. Getting educated about options can help. People are empowered when they fully understand the options that are available to them. Atlanta bankruptcy attorneys with a long history of handling bankruptcies can listen to people's situations and offer creative solutions to their financial predicament.