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Investment Property

The Georgia Department of Banking and Finance has no jurisdiction over the seller, real estate agents, appraiser, closing attorney, broker, lender or any other person involved in an investment, commercial or rental property conveyance.  Likewise, the Department has no jurisdiction over transactions involving second homes or property located in another state.  Under the Georgia Residential Mortgage Act (“GRMA”), this Department licenses lenders and brokers to make or broker mortgage loans secured by Georgia real estate, which is the borrower’s primary residence. 

Investment/Commercial property real estate lenders are often referred to as Hard Money Lenders.   Please note that a mortgage broker or lender does not need a GRMA license from the Department in order to broker or finance a rental property, second home, property located outside of Georgia, or commercial property. 

The Georgia Fair Lending Act (“GAFLA”) (sometimes called the “predatory lending law”) does not apply to investment property financing either, as it does not meet the GAFLA definition of a home loan.  Likewise, Section 32 of the federal Truth-in-Lending regulations (Federal Reserve Board Regulation Z, Section 226.32) is not applicable, as investment property financing does not satisfy the criteria that the consumer credit transaction is secured by the consumer’s principal dwelling.

Moreover, this Department is not empowered to resolve any factual or legal disputes, which may arise between a licensee and its customer.   Such matters, if not resolved directly by the parties, may be resolved in a court of appropriate jurisdiction.  You may want to consult an attorney to advise you of your rights and responsibilities based on the terms of any contract for financing the purchase of investment/commercial property or a second home.  The State Bar of Georgia or your local bar organizations may provide an attorney referral service.  You may also want to consider Magistrate’s Court (also called Small Claims Court) if your matter involves a money claim for less than $15,000.

As previously stated, the Department has no jurisdiction over the seller, real estate agents, appraiser, closing attorney, or any other person involved in an investment property conveyance.   While we are unable to assist you directly with your Complaint, we refer you to one or more of the following local organizations.

You may contact your local Better Business bureau office to file a complaint or inquire about a company’s general business practices.  Better Business Bureau of Metropolitan Atlanta, P. O. Box 161447, Atlanta, GA 30321; Telephone: (404) 766-0875 or (800) 282-7765; Fax: (404) 768-1085; Internet: www.atlanta.bbb.org.

If you your matter concerns a real estate agent or an appraiser please contact: Georgia Real Estate Commission and Appraisers Board, 229 Peachtree Street, NE, Suite 1000 – International Tower, Atlanta, GA  30303-1605, Tel: (404) 656-3916 or Fax:  (404) 656-6650 or www.grec.state.ga.us.

If you believe that the closing attorney has engaged in any illegal or unethical conduct, you may want to contact the State Bar of Georgia in addition to your personal attorney.  The State Bar of Georgia, 104 Marietta Street, NW, Suite 100, Atlanta, GA 30303. Tel: (404) 527-8700 or Fax: (404) 527-8717 or www.gabar.org.

If the alleged fraud relates to a U.S. Department of Housing & Urban Development (HUD) or Federal Housing Administration (FHA) program, you may file a complaint with HUD.   U.S. Department of Housing & Urban Development, Office of Inspector General Hotline, Assistant Inspector General for Investigations, 451 7th Street, SW, Room 8270, Washington, DC 20410; Tel: (800) 347-3735; Fax: (202) 708-4829.

If you believe that criminal activity was involved in your transaction, you should discuss that possibility with your attorney.  Your attorney may want you to report the suspicious activity to local, state, or federal law enforcement authorities.  The following information may help you get started.  You can find local (where the subject property is located) law enforcement authorities (Police, Sheriff, or District Attorney) in the blue pages of the telephone directory.  You may also contact the Federal Bureau of Investigation (FBI) in Atlanta at (404) 679-9000 or http://atlanta.fbi.gov/ or one of the Federal Prosecutors as follows: U.S. Attorney for the Northern District (Atlanta) at (404) 581-6068; U.S. Attorney for the Middle District (Macon) at (478) 752-3511; and U.S. Attorney for the Southern District (Savannah) at (912) 652-4422.

You can learn more about real estate fraud (commonly referred to as mortgage fraud) by visiting the Department’s article on mortgage fraud and the website of the Georgia Real Estate Fraud Prevention and Awareness Coalition (“GREFPAC”) at http://www.grefpac.org/.  Another resource would be the Georgia Real Estate Investors Association, a real estate investor trade association; their website is www.gareia.org.