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Why Bank Owned Properties Listing in Georgia Grew Fast

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By : John Cutts    99 or more times read
Bank owned properties listing in the residential and commercial sectors of Georgia grew fast because of several factors, including fast population growth, explosion of construction projects, preponderance of community banks and high unemployment rates, according to Georgia bankers.

According to Joe Brannen, head of the Georgia Bankers Association, residential development projects across the state soared during the boom years because of massive population growth in Georgia, particularly in the Atlanta area, over the past years.

Brannen said that over the past several years, about 120,000 people moved to metro Atlanta every year, putting Georgia sixth in a ranking of states based on population growth. He also added that both commercial and residential developers obtained loans easily because there were a lot of banks spread across the state.

He said that Georgia has a lot of community banks because each of the 159 counties in the state had to open its own bank because of the law prohibiting community banks from opening branch banks outside their home counties. It was only in 1996 that this law was repealed.

Bank owned properties listing in Georgia also grew fast because Georgia-based banks provided more residential and commercial development loans than banks in other states. Their loan portfolios were overloaded with development loans.

In a foreclosure report for October, Georgia had the eighth highest foreclosure rate, with one household in every 312 households in the state hit with a default or foreclosure filing. Postings in Georgia rose by 26 percent from filings in October last year.

From January to the second week of November, the total number of failed banks based in Georgia has reached 21, the highest compared to other states. Last year, a lot of Georgia banks also failed. Out of the 124 bank failures in the U.S. since January this year, Georgia accounted for 17 percent. The state accounts for three percent of the country’s population and four percent of the country’s total number of banks.

The most recent bank failure in Georgia occurred on November 13, when Sparta-based United Security Bank was closed by the Federal Deposit Insurance Corporation.

The FDIC reported that as of last week, the total number of troubled banks across the country has risen to 552 banks, the highest number in 16 years. It said that it expects more bank failures not only in Georgia, but also in other states, affirming the common expectation that bank owned properties listing growth will continue.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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