Georgia Foreclosures on Robo-Signing Induced Rollercoaster Ride

Georgia foreclosures have been on a rollercoaster ride over the past two years that have left the housing market and real estate professionals there reeling and not sure which way is up.

I presented the numbers, charts and graphs (see slideshow below) to support this statement at the 2013 Inaugural Meeting of the Georgia Association of Realtors last week, and after my meeting two kind Realtors who work the county with the state’s highest foreclosure rate — Walton County — approached me and explained they are living out the roller coaster ride I had just described based on the stats.

“Everything you presented up there, we are going through,” said one of them.

Georgia Foreclosure Situation & Outlook from RealtyTrac

Although Georgia is among the non-judicial foreclosure states — most of which have been less susceptible to being tossed to and fro by the storm waves generated by the robo-signing settlement  — it certainly has seen its foreclosure numbers ebb and flow in a way that appears to correlate to major milestones in the robo-signing saga.

Slide 7 below most clearly demonstrates this. After trending higher through most of 2010 and the first few months of 2011, Georgia foreclosure activity decreased on an annual basis for 13 straight months starting in March 2011. This trend began just a few months after the robo-signing controversy came to light in October 2012 and after the 49 state attorneys general investigation into foreclosure practices by the nation’s five leading lenders had gotten into full swing.

Right around the time that investigation was complete and a settlement was finalized between the attorneys general and five lenders — April 2012 — Georgia foreclosure spiked for three straight months in April, May and June 2012.

But then came a Georgia Court of Appeals ruling in July 2012 that held lenders to a higher standard in providing information about the entity that actually owns the mortgage to homeowners on foreclosure notices. Starting in July there have now been six straight months of annual decreases in Georgia foreclosures.

The rollercoaster ride of the past two years in Georgia foreshadows more bumps in the state’s foreclosure trends before its housing market can return to smooth sailing. The three-month surge in foreclosure notices in mid-2012 — not to mention the 32 percent of Georgia homeowners who are seriously underwater (see slide 16) — indicates there are still many homeowners in danger of foreclosure in the state.

Some of those latent foreclosures will come through the pipeline in 2013, and that along with the already-substantial foreclosure inventory in the state (see slide 11) ensures that the lingering foreclosure problem will continue to weigh down Georgia home prices this year while providing more inventory for Realtors to sell and buyers and investors to buy.

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