The Banking and Finance Committee of the Georgia State Senate resurrected a bill last week that its authors hope will smooth out some rough spots in foreclosure registries around the state. The bill would establish new registry guidelines and would place a limit on local fees charged to owners of properties in foreclosure. The full Senate may vote to advance the bill (House Bill 110) fairly soon.

During the foreclosure crisis, cities and counties realized that these distressed properties were falling into disrepair. The mere fact of a foreclosure in a neighborhood will have a negative effect on area home values; a rundown home will only exacerbate the problem.

To make sure the properties were properly maintained, cities and counties launched foreclosure registries. The lender that forecloses on a property must register the property; if the lender is not local, it must designate a local agent. There is a fee for registering and a penalty for failing to register.

Fees are not consistent from county to county or city to city. The bill proposes that the registration fee not exceed $175 and that the penalty would not exceed $500 per month or $2,000 total.

The bill standardizes the paperwork and criteria for registration as well, preempting the local rules. The one rule not pre-empted is the required registration of foreclosed properties with repeat violations that are uncorrected for 60 days.

A committee member said that the fee and penalty caps will keep local governments from treating foreclosed properties as cash cows. As an example, he said that DeKalb County collected in excess of $550,000 in fees and penalties in less than a year.

A spokesperson from the Association of County Commissioners of Georgia reported that county and city elected officials are receiving a lot of public comment about this proposal. The representative added that foreclosed properties are not being taken care of despite their large numbers, and there is no solid way of figuring out who is responsible.

The law will go into effect on July 1 if it is approved.

Source: DeseretNews.com, "Senate committee OKs bill to cap foreclosure fees," Errin Haines, Jan. 9, 2011