The Wall Street Journal reports that “GMAC Home Mortgage, Inc. a unit of Ally Financial Inc., J.P. Morgan Chase & Co.’s home loan unit and Bank of America Corp. have taken the unusual step of suspending tens of thousands of foreclosures in the 23 U.S. states that handle foreclosures through the court system, including New York, Florida, Illinois, New Jersey, and Connecticut, pending a review of their paperwork practices.” (click here to see the article).
The article details the story of a man named Israel Machado who challenged IndyMac’s attempt at foreclosing his house in Florida. Apparently, Indymac used a robo-signer named Erica Johnson-Seck who routinely signed 6,000 documents a week related to foreclosures. She could not not possibly have reviewed the facts of each case as required by law. In the Machado case, IndyMac could not even prove that they owned the mortgage. Mr. Machado stated that the purpose in challenging the foreclosure was “to get them to come to the negotiating table, to get me a fixed-rate mortgage that worked.”
While Mr. Machado may be able to pull this off in Florida, I don’t think it would ever work in Georgia. The Wall Street Journal reports that the average time a loan remains delinquent before going to foreclosure in Florida is 573 days. In contrast, Georgia is about six weeks. In Florida, the mortgage company has to file a lawsuit in state court to complete the foreclosure process. Georgia has a nonjudicial foreclosure process. In Georgia, a mortgage company will usually send you a letter accelerating the mortgage and express the intent to foreclose about two weeks before they start advertising the foreclosure in the legal organ of your county. After they have advertised your house for four weeks, they will foreclose on the court house steps on the first Tuesday of the following month.
In my opinion, Georgia is an extremely pro-mortgage company state. Thank goodness Georgia consumers have the federal option of filing Chapter 13 to stop a foreclosure of their home.