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Georgia tops the nation in foreclosures and there's no relief in sight

American dreams can dissolve into nightmares on the courthouse steps in Fulton County.

click to enlarge HANGING ON: Agnes Martin, 76, has lived in her Forest Park house for 20 years. She's now facing foreclosure and could lose her house in early December. - JOEFF DAVIS
  • Joeff Davis
  • HANGING ON: Agnes Martin, 76, has lived in her Forest Park house for 20 years. She's now facing foreclosure and could lose her house in early December.

That's where, on the first Tuesday of each month, thousands of homes are sold at the foreclosure auction. Some properties go for $600 and others for $2 million. All of them are tragic reminders of people who lost their homes because they couldn't pay.

A cold rain fell during the Nov. 7 auction. About 150 people lingered around, dressed in jeans and draped in long slickers. Some of them peered over the shoulders of attorneys who mumbled, like so many times before, foreclosure details such as "at public outcry, to the highest bidder for cash" and "all that tract or parcel of land lying and being in ... the 14th District of Fulton County." Others waited near the Pryor Street curb for firms to call out specific addresses and prices.

Around 11 a.m. the crowd swarmed.

A woman dressed in a purple sweatshirt and baseball cap stepped onto the courthouse steps. She represented McCalla Raymer, one of the largest law firms for lenders in the Southeast. People nudged each other to move close to her. They pulled out calculators attached to clipboards and sifted through printed charts that listed homes soon to be foreclosed. A man carrying a blue-and-white oversized umbrella poked a woman in a long, tan trench coat as he snaked through the folks. Two security guards asked people to stop blocking the steps. The crowd shifted to the right a bit and then turned back toward the rep.

The woman began to rattle off properties up for grabs for $315,000, $252,000 and $384,000.

"We can't hear you, speak up," shouted one man. "This is ridiculous."

She continued in a monotonous tone. Real estate investors strained their ears. Some held walkie-talkies or balanced cell phones in the crooks of their necks to transmit hard numbers to colleagues.

"We'll get as many houses as we can," said Tamara Cousins, a representative for Crown Valley Group, a real estate investment company.

She waited at the bottom of the courthouse steps while two of her associates jotted down info near the McCalla Raymer rep. Crown Valley had six delegates present and they hoped to scoop up 10 properties. Other people shook their heads in dismay, stunned by the spectacle of rabid bidders.

Absent from the auction were the individuals who stood on the brink of losing their homes.

Approximately 4,300 properties were up for grabs at the Fulton County auction in November. It was a record month, according to the Atlanta Foreclosure Report, and no signs show the rate will slow down anytime soon. In fact, it's just the opposite; one in every 195 households in metro Atlanta is foreclosed upon these days -- a 41 percent jump from last year. The state currently holds the No. 5 spot on the national list of highest foreclosure rates.

For years, jobs brought people to Atlanta, spurring intown gentrification and good suburban housing values. The metro area transformed into a hot housing market, and home buyers now will do anything to get into a house. The mortgage industry, in turn, has responded by offering creative financing plans that work for many people but can be disastrous for others.

The days when people put 10 or 20 percent down and locked in a 30-year, fixed-rate mortgage -- where monthly payments stay the same throughout the entire loan -- are pretty much over. Lenders have eased restrictions and now tease consumers with no-money-down agreements and dirt-cheap initial payments. Sometimes they even let home buyers, usually with less-than-perfect credit, choose how much they pay each month.

But many times, such plans leave home buyers with no equity cushion. They often can never afford the house when interest rates go up, or end up paying more than their houses are worth.

"People are financing today's payments tomorrow," says Todd Mark, director of consumer relations at the Consumer Credit Counseling Service of Greater Atlanta. "It's setting them up for failure."

The situation is exacerbated in Georgia because anti-consumer laws make the state's foreclosure process one of the quickest in the nation -- it can be completed in less than two months. Only Tennessee and Texas rival Georgia in foreclosure speediness.

Unlike states such as Florida and New York, where foreclosures take about a year under the watch of a judge, Georgia allows foreclosures to happen outside of a courtroom. The process makes it easy for lenders to repossess properties when homeowners default on their mortgage payments. All a lender has to do to foreclose is run an ad once a week for a month, send a letter to the homeowner at least 15 days before the foreclosure sale date, and then auction off the property on the county courthouse steps the first Tuesday of each month.

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