Originally created 03/01/01

Audit says inquiries into loans fall short



ATLANTA - State investigators don't have enough information to spot cases of predatory lending, according to a recent audit.

They don't even know how many mortgages were made in Georgia last year or at what interest rates, preventing them from determining how many were excessive. Plus, the agency charged with policing the industry doesn't check out-of-state police records to prevent felons from getting licensed as lenders and brokers.

The issue is particularly timely as the Senate considers a bill that would attempt to crack down on abusive lending practices, said to be worst in Clarke, Chatham and Fulton counties.

But the commissioner of the Department of Banking and Finance, which oversees the Georgia Residential Mortgage Program, says resources and vague legal definitions limit the agency's effectiveness.

Reviewers from the state Department of Audits and Accounts were blunt in their report issued in January.

"The program needs to better monitor its effectiveness in protecting consumers from abusive practices in the mortgage industry," they wrote.

The audit showed the program's two employees assigned to handle complaints are swamped and don't analyze the cases they tackle.

"The program should more actively monitor the complaints that it receives to identify patterns of consumer abuse by specific licensees," the auditors wrote.

Steve Bridges, the commissioner of Banking and Finance, asked Gov. Roy Barnes to include funds for extra staff in this year's budget request but came away empty-handed.

Mr. Bridges said only one case referred by the program for prosecution has received a grand jury indictment in three years.

Reach Walter C. Jones at (404) 589-8424.