Georgia Remains At The Forefront Of Foreclosure Crisis

FOR IMMEDIATE RELEASE

August 30, 2012

            Despite vigorous legislative and judicial activity at both the state and federal levels designed to stem foreclosure abuse, Georgia remains at the forefront of the mortgage foreclosure crisis, and banks and mortgage loan servicing entities have recently been found by courts to be continuing to engage in precisely the same abusive – even fraudulent – foreclosure techniques that in part gave rise to the ongoing crisis.  Unfortunately, it is only homeowners who have the will, means and determination to fight these abuses that have exposed banks’ continued abuses; homeowners who fail to put up a fight simply find themselves without a home.

            Georgia is a “non-judicial foreclosure” state, which means the lender can foreclose on a home without filing suit or appearing in court before a judge.  Unfortunately, lenders and their servicing agents often used this limited oversight to abuse the foreclosure process by foreclosing on homeowners with little or no notice, without affording the homeowner an opportunity to discuss ways to restructure their mortgage in order to keep it current, and even by foreclosing on homes without legal authority to do so.

            At the height of the foreclosure crisis, the State of Georgia, like many states throughout the nation, enacted a series of tough new laws designed to level the playing field with respect to foreclosures and ensure a degree of parity and fairness.  Among other things, Georgia now requires that the “secured creditor” – not a mortgage servicing agent – be identified in the property’s chain of title as having the power to foreclose on the property, and that the secured creditor given the homeowner of its notice of intent to foreclose as well as the identity of someone with the authority to discuss a loan modification or renegotiation.

            Action was taken to prevent abuse at the federal level as well.  In 2011 and 2012, civil enforcement actions were brought by the U.S. Department of Justice and the Comptroller of the Currency to address abusive and unlawful foreclosure practices on the part of a number of the nation’s large national banks.  Both actions resulted in consent decrees, prohibiting the banks from, among other things, “dual-tracking” (purporting to negotiate with a homeowner to modify or restructure a mortgage while simultaneously proceeding with the foreclosure process), using fraudulent assignments and signatures on mortgage documents, and taking action to foreclose without proper authority (e.g., where the foreclosing entity is merely the servicer, not the noteholder).

            These reforms and legal obligations have largely been ignored by the banks.  A small number of Georgia homeowners in recent years have brought lawsuits in state and federal court alleging wrongful and abusive foreclosure practices against banks, servicing agents, and their attorneys, detailing in their legal papers that the past abuses have gone on unabated.  Recent state and federal judicial decisions have found exactly that, granting restraining orders against the unlawful foreclosure activity and halting attempts by banks (that often not only foreclose on a home but then purchase the home themselves at a below-market price).

            Sadly for the homeowners who incur the stress and expense of having to resort to litigation to force banks to adhere to the law, it is only after litigation is filed and an injunction is in place that the banks seem willing to engage in legally-required discussed regarding loan modification or restructuring.  For those homeowners who cannot or do not litigate (or, even more disturbingly, pay exorbitant sums to so-called “foreclosure defense” operations that promise to negotiate with the bank, often with no results), the wrongful foreclosures simply march along at an alarming rate.

            The good news is that courts seem to be getting wise to the banks’ tactics.  As noted above, several state and federal courts in recent weeks have granting injunctive relief halting or reversing unlawful foreclosure activity on the part of the banks.  These orders have been the result of homeowners showing the courts in detail the internal operations of the banks and other foreclosing entities, and details the myriad ways that those foreclosure

            A non-judicial foreclosure venue, like Georgia, requires and presumes a degree of good faith and respect for the law, which has continued to be ignored and abused in the foreclosure process.  In light of the recent litigation to defend and enforce their rights and the courts’ decisions upholding then, banks do seem to be willing to comply with the law and come to the negotiating table, but only after being hauled into court and having their tactics exposed.

For more information, feel free to contact:

Wesley Kent Hill, Esq.
1800 Peachtree Street, Suite 300
Atlanta, Georgia 30309
Tel: (404) 736-9167