Foreclosure Victims in Georgia Hopeful about New Legislation

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Foreclosure victims in Georgia are hopeful about new legislation that would help mortgage problems and also in matters related to electricity and health issues. Consumer advocates are feeling upbeat about this year’s package of laws.

The ongoing recession has made the legislators extremely sensitive to the pressures coming from the financial sector. Most the lawmakers are feeling it personally – mainly those whose business enterprises have been falling or those who are seeing many in their constituents getting laid off.

A one-time committee that has been put up in the previous year to study the bankruptcy issues was chaired by Senator Ed Tarver. In June Senator Bill Hamrick chaired a Senate Banking Committee that listened to testimony about companies claiming to rescue foreclosure victims. This gave rise to the necessity of initiating laws to provide protection to the consumers from these types of scams.

The Senate Research Office noted that unstable or risky loans were the results of “poor underwriting practices.” The ARM (adjustable-rate-mortgage) is a typical example and invariably ended up in default.

While the consumer groups were upbeat about the legislation that Harmrick had sponsored, they were not happy with other bills relating to the electricity rates of Georgia and matters connected with health insurance. Allie Wall of a consumer advocacy group described the legislation as a mixed bag.

The Senate Bill 57 wants brokers to be sure that the borrowers are able to repay the mortgages they are taking. Brokers are also forbidden to pocket bonuses for selling loans with high interest.

Senate Bill 146 puts pressure on speedy procession of registration of property so that the house owners who are trying to sell the unit so as to avoid foreclosure, will be unable to do so because of lengthy time taken by the county clerk.

Another bill – SB 140 (initiated by Hamrick) would have given protection to the tenants residing in a foreclosed unit. They would have to be given prior warning and sufficient time to make alternative arrangements for shifting. Unfortunately it did not see the light of day.

Although the majority in the full Senate voted in favour of the two bills there were many senators whose interests were conflicting with the provisions of the bill, said Senator Vincent Fort (Democrat – Atlanta). He said, “It is troubling that so many legislators who have banking interests were voting on bills about banking and abusive lending.”