Anti-Fraud Law In Georgia Real Estate
Georgia real estate properties translate into fraud opportunities and baits for many unscrupulous individuals trying to lure prospective buyers and victims in the Georgian landscape. From 2002 to 2005, Georgia is a consistent topnotcher among mortgage and real estate fraud cases in the US documented by TPG or The Prieston Group. It is therefore not surprising that despite the beauty of Georgian properties, the real estate industry of Georgia continues to suffer setbacks brought by fraud.
According to the Prieston Group, a fraud protection and prevention group, there's a number of ways in which fraud can be committed. The types of fraud operations preying on Georgia real estate investors include occupancy fraud, false rent verifications, appraisal fraud, broker fraud, investment schemes, and identity theft. Among these, 48% of the claims from Georgia are filed as occupancy fraud. It occurs when a mortgage borrower knowingly misrepresents the intention of living in the property in a ploy to obtain lower mortgage rates. It does not matter whether the borrower is the owner of the property, an investor after lower financing costs, or a con artist attempting to get away with fraud. Fraud is still fraud, and the local Georgian government is pushing for more stringent measures to lower the state's fraud ranking and protect it's real estate industry.
The state upholds the Georgia Residential Mortgage Fraud Act which names misstating, omitting, and misrepresenting facts and intentions in real estate deals as criminal acts. Mortgage felony of this nature merits a 10-year jail term and fines amounting to $100000. Although there is wide appreciation for the mortgage fraud policy, there are some parties that see problems in upholding the policy.
They claim that lenders unaware of the borrowers' fraudulent intentions are also criminally liable. Michael Brook, a specialist in mortgage law, counters the claim by stating a policy provision that states that lenders are allowed to be defendants to plead their cases in the event that they are involved in fraud cases. In addition to the lenders, appraisers, brokers, real estate agents, and investors are possible defendants in a fraud case. He asserts that the stringency of the new policy makes committing frauds more difficult which discourages potential lawbreakers. He also claims that the move by Georgia serves a paradigm for other states. At present four more states are upholding similar laws, and California, another real estate hotspot is considering to adopt a similar policy.
The Georgia Residential Mortgage Fraud Act continues to boosts the real estate industry of state. Despite the mix of reactions regarding the new policy, there is no doubt that it minimizes risks of fraud in investing in Georgia real estate properties. Finally, hopes for the redemption of Georgia as fraud hotspot are high in the near future. The state looks forward to more real estate investors and the revival of its industry.
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Written by: Jason Murphy
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