A New Wave of Foreclosures for Atlanta?

With the recent catastrophic floods in the Atlanta area, many residents have been left wondering what to do with their severely damaged homes. Facing major repairs and no flood insurance, what options do you have? I recently heard of a couple that had just spent their life savings renovating their home in East Cobb. Sadly, the home was destroyed in the floods. Without flood insurance and not having any money in the bank, they feared their only option was to let the home go into foreclosure. What a devastating realization! Not only to lose your home and all of your possessions, but to be forced into foreclosure. It’s a terribly sad thing to think about, yet alone to be faced with.

Hearing about this sparked my thinking into the hundreds of homes that were under water last month. Are other homeowners facing the same grave decision of walking away? Will this create a whole new wave of foreclosures in the Atlanta area? If this is the case, what will the banks do with the homes? After being abandoned and without repair from the water damage, it’s likely that mold will set in and take over the insulation, sheet rock, carpets, etc. Many of the homes will become total rehab situations. The mold could pose a hazardous environment. Would the homes be condemned? Would the bank be forced to just bulldoze the homes and take a complete loss?

Cobb County does have access to funds provided by FEMA to buy the home from the owner to prevent foreclosure. The County would then use the FEMA funds to repair the home and resell it. Sounds ideal, right? Unfortunately, there are a few problems with this scenario as well. The first being that many homeowners owe more than what Cobb County could purchase the home for. Second, there are only enough funds to purchase 8-10 homes per year. With 1,200 homes in Cobb County that were affected by the historic floods…well, you do the math. Unfortunately, the FEMA funds are not nearly enough to stabilize this problem.

I suppose only time will tell, but I fear that a new wave of foreclosures are coming as a direct result of the flooding. Hang in there, Atlanta, I don’t think we are through the thick of it yet…
 

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