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Atlanta Foreclosure List Great for Buyers, a Pain for Banks

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By : John Cutts    99 or more times read
Any reliable Atlanta foreclosure list is a great thing for home buyers while a big pain for Georgia banks.

Since the start of the foreclosure crisis in 2008, a total of 37 Georgia banks have succumbed to the weight of losses in the real property sector, including seven that have followed the others to failure in the first three months of 2009.

On January 29, two Georgia banks, First National Bank of Georgia and Community Bank and Trust were closed by banking regulators. On March 19, three were closed Century Security Bank, Appalachian Community Bank and Bank of Hiawassee. On March 26, another two collapsed Unity National Bank and McIntosh Commercial Bank.

A huge majority of these Georgia banks, including all other failed banks throughout the country since 2008, collapsed largely because of record levels of bank foreclosure listings. As the demand for homes and business spaces surged, developers ran to the banks for financing and the banks welcomed them with huge loans, bypassing their own lending rules and even violating federal lending regulations.

Huge portions of their loan portfolios were allocated to residential and commercial property loans, never considering that just one major foreclosure list in Atlanta could wipe out their operations.

The biggest bank of the five latest Georgia failures was Appalachian Community Bank, which had $917.6 million in total deposits and $1 billion in total assets. It was purchased by Community and Southern Bank, a private-equity-backed entity led by former bank regulator Pat Frawley.

Appalachian provided huge loans to developers of upscale mountain vacation homes, which failed to get sold at the expected rate when the housing crisis forced banks to restrict lending. The bank was also clobbered by mismanagement allegations. In 2009, it lost about $57 million as the percentage of its problem real estate loans soared from 13 percent in the first months to 46 percent in the last months of 2009.

The number of bank residential properties in foreclosure list in Georgia soared to 13,607 units in the first quarter, accounting for 34.09 percent of the 39,911 foreclosure actions filed during the quarter. In March, the total of real estate owned units was 5,351 units, accounting for 30.1 percent of total filings for the month.

In charts of foreclosed home by state in the first quarter, Georgia ranked seventh.

On the whole, any Atlanta foreclosure list can be handled well by a Georgia bank if it limits the volume of its mortgage loans to the level allowed by standard banking practice.

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