Consumer Advocates Say Laws Don't Protect Homeowners

February 26, 2009

COLUMBUS, Ga-(WTVM)-Some consumer advocates are getting tough in the fight against foreclosures.  The National Consumer Law Center released a report today outlining what it considers unfair practices that don't properly protect homeonwers from foreclosure.

The group says while says while much of the foreclosure crisis has focused on finances, it's antiquated state laws that don't offer enough protection to keep people in their homes.

For example, NCLC says in more than 40 states there's no requirement to personally serve homeowners with a foreclosure notice.

Plus, about 30 states don't require any court involvement, including Georgia and Alabama.

NeighborWorks Columbus Melanie Faison says the laws do need to be updated to meet the current demands.  She explains how in Alabama, there is a possibility for homeowners to get their property back, but it's expensive and nearly impossible for most.

"You do have the right of redemption, meaning that you can come back and possess the property if you can pay all the fines and the fees and the actual cost of the home," explains Faison.

Faison also showed us a timeline of the foreclosure process in Georgia.  She says once a homeowner gets behind on payments, it's tough to get ahead again.

In it's report, NCLC also outlines several changes they hope lawmakers and lenders will consider.  One of which is to require states to offer some type mitigation before the foreclosure is finalized.

"There should be some provision if they see that a family has contacted an agency like us who does foreclosure mitigation counseling that should stave it off for a couple of months, give them that time to work it out," says Faison.

Cathy Hodge, President of the Columbus Mortgage Bankers Association says that could save banks money too.

"We want to lend money, we don't want to own a house," says Hodge.

In the end, experts say a process that keeps buyers in homes, works better for everyone.

"It does us no good to have that house and have all the legal fees incurred to foreclose on it and to sell it and then maybe sell it at a loss and have even have incurred more losses as a result," adds Hodge.

"The laws have to be changed to be consumer friendly as well as lender friendly," says Faison.

Click here to read a copy of the full report.