An effort to protect Georgia homeowners from foreclosure fraud is expected to move out of committee Monday in the state House of Representatives.
House Bill 237 is a key part of the legislative agenda of new Attorney General Sam Olens. It calls for criminalizing falsifying documents and gives Olens and district attorneys more power to investigate claims of fraud.
“There is an unacceptable level of inappropriate conduct that has hurt confidence of homeowners across the state and the country,” Olens explained to committee members during a hearing last week .
The problem is that foreclosure guidelines and what constituted fraud was not addressed in the state’s 1995 mortgage fraud law.
That oversight has left Olens powerless to demand records and investigate when residents call with complaints. The main issue appears to be some lenders backdating and otherwise falsifying documents in the long chains of transfers, which makes the process go faster.
The new proposal criminalizes that work as forgery. It does not, however, address issues such as the missed payments that prompted the foreclosure process in the first place.
Olens reached out to the banking community before suggesting the bill, which is being sponsored by Smynra Republican Rich Golick. The industry has supported the measure, with small changes expected to come up in Monday’s meeting.
The banks want to add language that separates bad intent from mere mistakes. And community banks want some limit to subpoena powers because of concerns about the cost to copy all records.
“That is clearly an improvement we want, but we do support the proposal,” said Joe Brannen, president of the Georgia Bankers Association. “It’s our responsibility to do (a foreclosure) right.”
The proposal is expected to move quickly from the Judiciary Non-Civil committee to a floor vote, possibly as early as week’s end .
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