A red scarf draped over a bannister is one of the few clues that Sidnetta Smith and her children lived in the sandy-gray, two-story Conyers home.
It was taken by a bank, even though that bank didn't hold a valid mortgage on it.
Bank of America has since tried to rescind its April 2010 foreclosure. But hitting the reset button can't undo uprooting her kids or replace family photos, jewelry and kids' honor roll certificates.
"I miss it. I miss it a lot," a stoic Smith, 41, said of the still-vacant home on Wall Street.
Smith's case highlights how few protections borrower advocates say Georgia offers during foreclosure. Georgia, like most states, has no "judicial review" in which a judge verifies basic facts before a bank can take a house. In the "non-judicial" system, bankruptcy or a lawsuit are the main means of disputing a foreclosure.
Advocates for borrowers say it's impossible to know how many improper foreclosures have occurred because no one is monitoring the validity of the paperwork.
Georgia's foreclosure rate was No. 1 in the U.S. in May, according to RealtyTrac. The financial industry says documentation problems are exceptions. Bankers say the vast majority of borrowers are far behind on their mortgages and the non-judicial process is more efficient in clearing the backlog and healing the housing market. And, fraud and slipshod paperwork have also occurred in many states that have judicial review.
Smith's attorney, Charles Pekor, said a check of Rockdale County property records before her home was foreclosed should have shown that she already had a new mortgage by then. Proper documentation had not been filed to cancel her first loan, but a second security deed should have bolstered Smith's assertions that Bank of America did not hold her mortgage. She also contends she was current on her new loan until she was forced out of her house.
A bank spokesman blamed Taylor Bean & Whitaker, Smith's original mortgage lender. Taylor Bean was a Florida firm that collapsed in August 2009. Its chairman was convicted last year on charges related to a $3 billion mortgage fraud scheme.
Eight days after Taylor Bean was closed, Smith refinanced her Taylor Bean loan with Freedom Mortgage.
The payoff of the Taylor Bean loan wasn't recorded in Rockdale until December 2010, eight months after Bank of America foreclosed on Smith's house.
The government transferred thousands of Taylor Bean mortgages after it was closed to Bank of America, and records of monthly payments and mortgage payoffs were temporarily lost in the confusion. Bank of America said it is working with regulators and borrowers to fix problems.
That's little solace to Smith.
She says her health deteriorated from the stress and she took medical leave from work.
The mother of four is suing Bank of America. She's also suing Freedom Mortgage, contending it mishandled canceling the Taylor Bean mortgage, and another company that she alleges violated state law when it seized many of her belongings from the house.
Though her case is unusual, Smith is not the only Georgia borrower caught up in Taylor Bean's collapse. In February, the Atlanta Journal-Constitution reported on the documentation snafu in a Lithonia woman's mortgage refinance, which led to as many as three banks attempting to foreclose. She filed for bankruptcy to stop a foreclosure and is also suing Bank of America.
John Bartholomew, an attorney with Atlanta Legal Aid Society, said his group has seen "dead mortgages" bite other borrowers when other lenders mishandled paperwork.
He said a judicial review system might help root out documentation problems.
"You have thousands of foreclosures being posted every month in a state where it doesn't take long to foreclose," Bartholomew said. "It makes these types of errors happen more often than they should be."
Smith started receiving late notices from Bank of America within weeks of her refinance with Freedom Mortgage. She said Bank of America and Freedom Mortgage gave her the runaround and that the companies refused to talk to one another to confirm the payoff of the Taylor Bean loan. She claims one Freedom Mortgage representative even told her to ignore Bank of America's notices.
James Blum, an attorney for Freedom Mortgage, denied his client did anything wrong. In an e-mail, he wrote, "In connection with that refinance transaction, Freedom Mortgage paid off Ms. Smith's prior mortgage loan, which Bank of America thereafter improperly foreclosed."
Though Smith hasn't had a perfect finanical record — she filed for bankruptcy in 2003 — she contends she paid Freedom Mortgage every month until a law firm sent a notice to vacate the house, about five months after Bank of America foreclosed.
After packing up half her belongings and moving them to North Carolina in November 2010, Smith returned to the home a few weeks later to find the locks changed and her remaining valuables gone.
Today, Smith lives in a three-bedroom apartment about 20 miles north of Charlotte.
"We have a roof over our heads. We're grateful," she said. "But it can never replace a dream home you thought you'd have forever."
Judicial vs. non-judicial foreclosures
Slightly more than half the states do not require a court hearing before a lender forecloses. In so-called "judicial foreclosure" states, a court hears evidence confirming a borrower's default and a lender must establish a right to foreclose on the property. A borrower can challenge the evidence presented. In Georgia, which is a "non-judicial foreclosure" state, a bank or its agent on its behalf files documents asserting a default and the lender's right to foreclose. The property can then be auctioned on the courthouse steps and the bank or someone else can buy it.
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