Foreclosure Victims Cannot be Saved Without State Assistance

The situation is grim. Foreclosure victims cannot be saved without state assistance. The legislators should try to act immediately to access in depth the mortgage practices that have been hurting the borrowers.

Sale of new residential houses in Atlanta has fallen by 52% during the last twelve months. February saw the biggest number of foreclosure postings and the unemployment figures made a record last January. One eighth of all mortgage holders in Georgia are now either in or about to enter foreclosure.

The General Assembly cannot be expected to sit back and wait hoping for the free market to correct itself. The state government was responsible for setting the stage for this economic debacle. It did nothing to stop the predatory lending when it had the chance. But now it must resolve the woes.

Frank Alexander is a law professor and has authored “Georgia Real Estate Finance and Foreclosure Law.” He said about the state, “By acting in the ways it can act and in ways consistent with other states, the General Assembly can reduce the depth of the harm and the length of the harm to our housing market.” The legislators however are continuing to dither. 72 of these legislators have close financial links with the banking industry. If they do not do anything then “Our foreclosures will continue higher for longer, and the consequences to our market will be far worse,” further added Alexander.

The Georgia Generally Assembly has always dismissed the matter of foreclosures as personal tragedies and put the blame on the borrowers for taking loans in an irresponsible manner. It was alleged that borrowers walked into houses they could ill afford without properly reading the terms of the loans. In 2003 it took on a more harsh tone when the Republicans that had gained a majority repealed the 2002 Fair Lending Act. The latter prohibited many lending activities that are now being blamed for the collapse of today that has ultimately led to recession.

Georgia is now holding 8th position in the foreclosure race while adjacent North Carolina ranks 33rd. This is mainly because of its stringent lending regulations.

Foreclosures are now gnawing into real estate prices that are telling on consumer spending patterns, loss of constructions jobs and reduction in tax collection. Despite the area being cursed with dotted foreclosed houses the state is still humming and hawing about strong anti foreclosure measures.