In Georgia, Illegal Foreclosure Practices Go Unnoticed, Part Two
Earlier this week, we talked about the effects of the foreclosure investigation on Georgia homeowners. According to lending industry officials, foreclosures occur because borrowers can’t keep up with their mortgages, and not because lenders engage in illegal practices.
But consumer advocates say that borrowers’ financial troubles are a main reason that foreclosure abuse has gone unnoticed in Georgia. State law allows judicial foreclosures, but most lenders require homeowners to waive their right to the procedure during the closing process. Even if such rights are not waived, struggling homeowners often lack the resources – or the will – to contest their foreclosure. It is often a classic case of David against Goliath: lenders must only assert that they have the right to foreclose against homeowners, and are not required to prove it. For homeowners, it can be downright impossible to fight back.
According to Atlanta Legal Aid Society attorney John Bartholomew, there have been a handful of clients with foreclosure documents bearing the signatures of these robo-signers, which likely indicates that more are out there. “It raises red flags that these files are being pumped through with little review,” he said.
Lenders do not deny this, but instead say that this relatively small number of reported problems does not justify a large-scale investigation or overhaul of the entire foreclosure system. Bankers Association Chief Brannan says that there are checks in place to ensure that proper procedures take place. Lenders must take an oath swearing that documents are correct, and title insurance companies must ensure that a property has clear title.
According to Brannen, judicial oversight would not lower the foreclosure rate in Georgia, but would just cause cases to drag out over an extended period of time, delaying the state’s economic recovery. Currently, foreclosures take an average of 241 days in Georgia, although lenders can fully foreclose in less than 40 days. Nationally, foreclosures take an average of 355 days.
However, for the struggling homeowner, a few more weeks or months might make all the difference.
Source: The Atlanta Journal-Constitution, “Georgia’s no-trial foreclosures mask problems, critics say”, J. Scott Trubey, 27 October 2010