Friday, June 29, 2007
News Atlanta still high in foreclosures
Posted by Scott Freeman on Fri, Jun 29, 2007 at 8:00 PM
According to a story on CNNMoney.com, Atlanta's 30310 ZIP code is second only to one in Cleveland as the single ZIP code with the most foreclosures over the past three months.
Cleveland's 44105 ZIP code had 783 foreclosures, followed by Atlanta's 30310 (southwest Atlanta) with 709. According to the story:
Many Sun-Belt buyers bought their high-priced houses using 2/28 adjustable rate mortgages (ARMs) which featured very low initial, or "teaser," rates that reset much higher after the first two years of fixed payments.But ARMs are best used ... as credit-repair products. They're set up for borrowers to show they can keep up mortgage payments and then refinance out into affordable fixed-rate loans after two years.
Many buyers used ARMs to get into a house with little regard for whether they could afford the payments, betting that rising prices could build enough home equity they could tap for cash.
When prices stabilized or fell, that safety valve disappeared. Owners couldn't pay monthly bills, and they had no equity to draw on.
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