The logic behind the numbers
FORECLOSURES – Foreclosure referrals in January 2023 were at their highest level since pre—Covid. Those foreclosure numbers have continued to increase for a number of reasons. Pandemic era safeguards expired and homeowners have exhausted the opportunities for loan modifications that were available during that time. In the CSRA, the local housing boom raised prices which increased equity increased in most residential properties. This meant that properties that were previously underwater, with the lenders unwilling to foreclose, now had sufficient equity that would allow banks/lenders to foreclose and recoup their loan amount in full. Finally, the increase in property values meant that the escrow amounts for property taxes and homeowner’s insurance also increased, making some mortgage payments unaffordable to cash – strapped consumers.
REPOSSESSIONS – Subprime auto lending was one of the first lending sectors to rebound from the pandemic, primarily due to the lack of vehicle inventory and the desperate need for replacement of automobiles when they were no longer operational due to accident or age. Much like the housing market, used vehicles did not depreciate as much due to lack of inventory, and some vehicles like trucks actually maintained or increased their value. Like banks and mortgage lenders, auto lenders were more willing to repossess vehicles that held their value since they would generate more money to pay off the loan. The repossessed vehicles could immediately be resold due to the high demand.
LAWSUITS AND GARNISHMENTS – The post-pandemic backlog of cases has been resolved, as most debt collection cases were handled in the Magistrate Court where the parties were required to appear in person. Now that the normal workforce has been restored, there are wages available to be garnished on collection judgments, and higher wages in some sectors mean more money can be recovered via garnishment.
SCAMS/FRAUD – Online scammers/fraudsters have become very prolific and skilled in gaining the confidence of even very sophisticated consumers. Unfortunately, the elderly are the most frequent targets. The goal of online scammers is to secure personally identifiable information that will allow them to deplete bank accounts and possibly incur debt in the name of the victim.
If you are facing any of these issues, there may be bankruptcy relief available to help you protect your home, car and wages. At Leiden and Leiden, we offer a free bankruptcy consultation so that we can discuss the relief available to eligible Georgia consumers.