Russell and Amanda Greene figured the three-bedroom house on Trillium Trail was an ideal place to raise their young son, Logan.
They grew tired of renting by 2004 and believed their dual income could support the monthly mortgage payment of $1,000.
But spiraling cost-of-living increases — along with the house note — soon left their family budget in the red. And since October, they filed bankruptcy twice to avoid losing their home to foreclosure.
“It would be really heartbreaking (to lose the home) because this is really all Logan has ever known. I don’t want to take that away from him,” said Amanda Greene, 31. “This is something we have fought really hard for, and we intend to keep it.”
The Greenes’ struggle highlights the growing foreclosure crisis sweeping Floyd County and the nation.
County property records reflect 175 foreclosure filings since May. About 35 properties in Floyd entered some stage of foreclosure during the first quarter of 2007, according to Irvine, Calif.-based RealtyTrac Inc.
Click to view ‘Floyd foreclosures by ZIP map’
The company’s countywide foreclosure listings include default notices, pending auction sales and bank repossessions.
A report issued by RealtyTrac last month listed Georgia’s foreclosure rate as more than twice the national average, with one filing for every 299 households. The state recorded 12,602 foreclosure filings, up 75 percent from June.
Crisis rocks markets
Much of the fallout nationally stems from subprime — or higher interest-rate — loans that mortgage lenders offered to borrowers with weak credit histories during the past decade.
Many of those borrowers offered little or no down payment in return for 100 percent financing and defaulted on the loans as interest rates soared, leaving lenders with the debt.
The situation hit a crisis this month as dozens of lenders — including Atlanta-based Homebanc Mortgage Corp. — bailed out of the mortgage business, triggering a plunge in worldwide stock markets. Investors pulled cash from the markets, drying up the available credit mortgage lenders were able to tap as a safety net.
Stocks rebounded Aug. 17 after the Federal Reserve intervened, cutting the discount rate it offers on loans to banks.
But the situation has yet to stabilize in Floyd County, where real estate agents and lenders say the local housing market has been flooded with foreclosed properties.
The local impact
The Floyd County real estate market was red-hot three or four years ago, said Ian O’Shea, vice president of sales and marketing at Garden Lakes Realty Co.
Interest rates were very low, home values were appreciating rapidly, and homebuyers figured the purchase would yield a future profit, O’Shea said.
Many would-be homeowners — swayed by the advertising blitz from Internet-based and other mortgage lenders — took the debt risk. Longtime homeowners also saw it as a prime time to refinance their properties and cash out the equity.
Bruce Epperson, branch manager with Vanguard Mortgage in Rome, said interest rates for adjustable-rate mortgages jumped to 6.75 percent in March from 5.25 percent three years ago.
For many, the rate spike amounted to an additional monthly mortgage payment within the same year, O’Shea said.
Those with more traditional, fixed rates also felt the pinch as gas prices soared, sending the cost of utilities, groceries and other vital services on a parallel climb.
O’Shea said the inflationary period made it more difficult for people to sell their homes and get out of debt. “A lot of people have just walked away,” he said.
Trinie Davis, a 22-year veteran agent with Jason Free Realty, attributes some of the foreclosure surge in Floyd to plant closings and job losses. Davis said she also has noticed an unusual increase in commercial and investment property foreclosures.
The foreclosure crisis is making it more difficult for people to qualify for home loans, since lenders are conducting more thorough income reviews, she said.
“We have to adjust the way we sell now,” Davis said. “The days of people being able to get 100 percent financing, I think, are going away.”
‘We don’t want to lose it’
Amanda Greene said she had a good-paying job when she and her husband took out their fixed-rate mortgage three years ago.
A month after they moved into the new home, Greene said, her employer sold to another company, and she lost her job.
The family’s bills began to mount, and the mortgage lender soon threatened foreclosure.
The couple filed for bankruptcy in October and re-filed in April after their lender demanded more payments.
Floyd County eventually hired her, and her husband took a second job to meet the monthly bills.
“We both got a raise this year, but our health insurance premiums went up, so it was like we never even got the raise,” she said. “It’s like we are sinking real slowly.”
Greene said the family has gone without certain groceries and other expenses to meet the bankruptcy payments. They believe it’s worth it.
“I know it’s just a house,” she said. “But we worked really hard to get it, and we don’t want to lose it.”
Click here to search Floyd County foreclosures by street, city or ZIP code.
