Bank of America Listings Controversy Brings Out Processing Problems- By: John Cutts
After allegations regarding the use of faulty paperwork in processing foreclosed properties under Bank of America listings came out, the procedure of how lenders handle distressed properties in Georgia became the focus of the housing market industry. According to local reports, only a handful of foreclosure cases in the state have documentation problems.
However, critics of the state's policies for Covington foreclosures and distressed properties in all parts of the state have asserted that just because only a few had been reported does not mean that such problems are not prevalent in Georgia just like in other U.S. states.
Consumer advocates and critics have argued that the way by which Georgia foreclosure homes are processed should be modified. The state is among the 27 U.S. regions where lenders are not required to appear in court to pursue a foreclosure. According to those who proposed a rule modification, the deficiency of the current regulation is in the absence of impartial oversight that courts provide.
In response, lenders have argued that problems related to the processing of properties under Bank of America listings several other states have been found in court proceedings. They added that the non-judicial system of Georgia works for both borrowers and lenders and that problems with documentation found in the region have been isolated cases.
Lenders also added that the reason one can find bank foreclosures in Georgia is because borrowers were unable to meet their monthly mortgage obligations, not because the policies governing foreclosures are not working. They argued that the current rule for foreclosed properties in the state actually encourages negotiation between homeowners and lenders.
Georgia's foreclosure numbers jumped by 23.5% in the third quarter of 2010 compared with the same 2009 quarter. One household out of every 98 is under foreclosure in the state during the third quarter, representing an 8.3% increase compared with the second quarter of the current year. The state is seventh nationwide for the July-September 2010 period in terms of foreclosure rates.
Following the controversy surrounding the processing of distressed properties under Bank of America listings, state consumer advocates have called for a change in foreclosure laws, asserting that there should be tighter requirements before lenders are allowed to foreclose on a property.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.