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Addressing the Foreclosure Crisis: Action-Oriented Research in Atlanta

This research focuses on the foreclosure crisis in the Greater Atlanta area, highlighting the increase in filings and limited response prior to the Neighborhood Stabilization Program (NSP). The strategy of the NSP in DeKalb County is discussed, along with the challenges and opportunities for addressing the crisis.

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Addressing the Foreclosure Crisis: Action-Oriented Research in Atlanta

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  1. Addressing the Foreclosure Crisis:Action Oriented Research in the Greater Atlanta Area Michael J. RichEmory University

  2. Atlanta Metro Area

  3. 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

  4. Metropolitan Housing Conditions and Trends Hendey, Kingsley, Pettit, Metropolitan Profiles, 2008

  5. Home Value Trajectories for the Atlanta Metropolitan Area Source: Case-Shiller Index, Immergluck and Lee , 2008

  6. Mortgage Market Conditions and Trends Hendey, Kingsley, Pettit, Metropolitan Profiles, 2008

  7. Percent of Home Mortgage Loans Made by Subprime Lenders, 2003-2005

  8. Foreclosure filings, June – August 2008 Number of filings Foreclosures per square mile

  9. 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)

  10. 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

  11. 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): Less than 200 units v. 10,000 foreclosure filings Jan – Sep 2008

  12. 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

  13. 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

  14. 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

  15. 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 filingsREOs • Identify inventories and hotspots • Profiles of neighborhoods • Monitoring response

  16. 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 organizations Opportunities • NSP funds as a spark for action • Recognition of need for good data • State funding (NSP) potential for greater state-local interaction

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