SAVANNAH, Ga. -- Georgia has had the unwelcome distinction of being ranked No. 1 in the country when it comes to mortgage fraud for the past few years.
The peach state has topped the list for the past four years, but in early 2006, it dropped to number three only to rise again to number one by year end, Rob Braswell, commissioner with Georgia's Department of Banking and Finance told attendees at the Georgia Credit Union Affiliates' annual convention. A few weeks ago, Georgia had dropped to number 12, but just two weeks ago, had climbed back to fourth place, Braswell said.
Based on a number of complaints Braswell's office had received on deceptive mortgage ads that purported to be tied to a person's lender, the regulator has included a provision in a housekeeping bill to eliminate certain loopholes. The subprime mortgage market in Georgia "is in disarray," Braswell said, adding 50 lenders have gone out of business in this area.
"My opinion is the market is correcting itself. There was all this motivation to make the deal and now they're paying the piper," Braswell said.
As NCUA Region III Director Alonzo Swann also urged, Braswell appealed to credit unions to work with members who may have interest in "exotic" mortgages. He said the country is in the first wave of the fallout from subprime mortgages and warned a "second wave is coming."