addressing the foreclosure crisis: action oriented research in the greater atlanta area michael j....
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Addressing the Foreclosure Crisis:Action Oriented Research in the Greater Atlanta Area
Michael J. RichEmory University
Atlanta Metro Area
Year
City population(thousands)
% of metro area
1970 495 33
1980 425 22
1990 415 16
2000 416 12
2007 464 11
Atlanta Profile
• Georgia is a nonjudicial foreclosure state—– Initiated by lender (or its agent) and not subject to
court supervision– Entire process from initial notice to court house sale
less than 45 days
• Few borrower protections• Foreclosure filings increased in 13-county metro
area from 37,000 in 2005 to 58,000 in 2007 (57%), which is almost 4 times the level of 2000
Metropolitan Housing Conditions and TrendsU.S. Average Atlanta Chicago Washington, DC
Population (000s, city/suburbs), 2007 433/4,839 2,738/6,785 588/4,718
Poverty (%, 2007, city/suburbs) 21/10 20/8 16/6
Housing Units (000s) 2007 % chg/yr, 2000-07
127,8951.4
2,1133.6
3,7521.2
2,1331.7
Vacancy rate (%, 2007) Renters Owners
8.02.5
11.54.3
8.12.7
7.42.3
Homeownership (%, 2007) Total Minority
6750
7055
6953
6857
Housing Values Owner-Occupied, 2007 Avg. Gross Rent, 2007
278878
260909
325920
5211,282
Housing Prices (OFHEO Index) Q1/2000 – Q4/2006 Q4/2006 – Q2/2008
5.5-5.9
2.5-4.4
5.3-5.5
11.5-11.7
Housing Affordability Pay more than 30% income for housing Renters Owners
4949
5050
5050
4747
Hendey, Kingsley, Pettit, Metropolitan Profiles, 2008
Home Value Trajectories for the Atlanta Metropolitan Area
50
100
150
200
250
300
Pri
ce G
ain
Over
Jan
uary
2000
20 Metro Index
Chicago Metro
Atlanta Metro
San FranciscoMetro
ClevelandMetro
Los AngelesMetro
Source: Case-Shiller Index, Immergluck and Lee , 2008
Table 5
Ave. 100Largest Washing-Metros Atlanta Chicago ton DC
Mortgages originated/ 1997 44 65 48 57 1,000 units 1-4 unit 2000 55 81 62 89 structures in 2000 2006 80 144 84 117
2007 54 87 53 75
Mortgage denial rate 1997 22 19 11 12 (%) 2000 22 20 14 11
2006 18 20 21 15 2007 19 21 21 16
Subprime % of purchase 1997 4 5 3 2 mortgages 2000 8 9 6 5
2006 12 13 15 12
Subprime % of refinancing 1997 21 23 21 16 loans 2000 26 29 22 19
2006 17 16 20 16
Investors as % of 1997 8 5 7 3 all borrowers 2000 7 7 5 3
2006 14 17 11 7 2007 13 14 11 6
Source: Analysis of DataPlace Home Mortgage Disclosure Act data files.
Mortgage Market Conditions and Trends
Hendey, Kingsley, Pettit, Metropolitan Profiles, 2008
Percent of Home Mortgage Loans Made by Subprime Lenders, 2003-2005
Foreclosure filings, June – August 2008Number of filings Foreclosures per square mile
Atlanta Area Response
• Limited response prior to NSP– Prevention activities
• Consumer Credit Counseling Services• CD and Housing counseling groups• Atlanta Legal Aid Homeowner Defense Project• DeKalb County Foreclosure Task Force
– Mitigation activities• Land bank authority reinvigorated• ANDP, Enterprise launched initiative (50 homes)
Neighborhood Stabilization Program Profile
• Six recipients in Metropolitan Atlanta– DeKalb County $18.5 million– City of Atlanta $12.3 million– Gwinnett County $10.5 million– Fulton County $10.3 million– Clayton County $ 9.7 million– Cobb County $ 6.9 million
– State of Georgia $77.0 million
DeKalb County NSP Strategy• Geographic targeting: five tiers• Social targeting: 25-30% of NSP funds to households
<50% of AMI ($35,600)• Strategic use of funds (leverage):
Strategy Dollars Units
Financing mechanisms $.7.5 million 100 single family1 multi-family
Purchase and rehab $7.5 million 56 units
Land bank $500,000 4 units
Demolition $500,000 28 units
Redevelopment $500,000 4 units
Administration $1.8 million
Less than 200 units v. 10,000 foreclosure filings Jan – Sep 2008
DeKalb County Priority Areas
• Number and percentage of subprime loans
• Number and percentage of foreclosures
• Number and percentage of defaults and delinquencies
Source: DeKalb County NSP Application, draft
Sustainability/Stabilization Principles
Priorities for properties located in areas with:• Existing community group or organization• Overlay zone or LCI initiative• Senior citizens or youth facilities• High crime rate• Major employment center• Special needs • Threat to major multi-family development
Partners• Public Agencies
– Atlanta Regional Commission– DeKalb County, Fulton County, Atlanta– GA Dept. of Community Affairs– Federal Reserve Bank of Atlanta
• Nonprofit Organizations– NeighborWorks– Atlanta Legal Aid Society– Atlanta Neighborhood Development Partnership– Enterprise Community Partners– Annie E. Casey Foundation Atlanta Civic Site– Atlanta Housing Association of Neighborhood-Based Developers
Work Plan
• Focus on DeKalb and Fulton Counties and city of Atlanta (about 42% of foreclosure filings)
• Assist with NSP application– Identifying areas of concentration
• Emphasis on REO neighborhoods– Subprime Foreclosure filingsREOs
1. Identify inventories and hotspots2. Profiles of neighborhoods3. Monitoring response
Challenges and Opportunities
Challenges• Building a data system across multiple counties• Time and attention of partners• Crowded field but lack of coherence• Lack of fit between need and organizationsOpportunities• NSP funds as a spark for action• Recognition of need for good data• State funding (NSP) potential for greater state-
local interaction