With a 21 percent of the region’s residents living below the poverty level, many residents of northeastern Georgia likely delay needed care because they feel they cannot afford it, often having no choice but to postpone both preventative and ongoing care in order to pay their rent or mortgage. As its area’s primary safety net facility, Northeast Georgia Medical Center shoulders the financial burden of caring for needy patients, offering many services at a discount, and some preventative care on a sliding scale or at no charge.

Northeast Georgia Medical Center serves as a state model for its participation in programs that help uninsured and low-income individuals access care. However, the hospital also engages in certain practices that mirror those of other nonprofit hospitals in Georgia, including high executive compensation and tremendous mark-ups, which is a barrier to affordable care for uninsured, underinsured, low-income and self-pay patients.

“Northeast Georgia Medical Center has many practices and programs that directly benefit their patients and their community,” said Hospital Accountability Project Manager Holly Lang. “But the hospital charges are high and, even when discounted, can easily prove to be a barrier to affordable care for many.”

In our research of Northeast Georgia Medical Center, we have found:

· In 2008, the hospital charged approximately $1.00 for every $0.30 a service or procedure actually cost – a mark-up of about 333 percent, an amount significantly higher than the state average of 247 percent, but is comparable to peer hospitals that provide similar specialty services and serve a disproportionate share of indigent and Medicaid patients;

· Northeast Georgia Medical Center’s quality of care is often awarded, and the hospital ranks among the top in the state for cardiac services;

· The hospital’s chief executive officer is among the highest paid not-for-profit hospital executives in Georgia, receiving a salary of $821,619 in FY2008, a figure about 35 times that of the average resident in Hall County in 2008, where the Medical Center is located and where, in 2008, 13 percent of individuals lived below the poverty level; and,

· Northeast Georgia Medical Center renders considerable transparency to consumers through its detailed community benefits report, which provides itemized financial information on each of its expenditures aimed at serving its local community.

Without affordable care, many conditions or medical needs that could have been treated affordably and efficiently in a clinic or primary care setting can escalate to the point of needing emergency treatment, the most expensive type of care. This not only directly impacts the consumer both fiscally and physically, but also the community as a whole, including the hospital, which may be left with an unpaid bill.

While Northeast Georgia Medical Center has significantly contributed to local programs that aim to address these issues, elected officials, hospital leadership, community leaders, employee representatives, patients and other stakeholders must continue working to identify and confront the barriers to affordable care the region’s uninsured and underinsured face.

View the report.

These policies would drive down energy costs for families in every state while jump-starting a clean energy economy across the country to put Americans back to work.

The report demonstrates the immense benefits to Georgia families of including strong energy efficiency policies as part of the climate and energy package and job-creation measures currently being debated by the U.S. Senate. The report, “Building on the Success of Energy Efficiency Programs to Ensure an Affordable Energy Future,” is the first to look strictly at the effects of energy efficiency on home energy use and home utility bills since climate legislation began moving in Congress earlier this year.

Based on an analysis of state programs and recent national studies, the report concludes that energy efficiency programs can dramatically cut energy waste and that strong federal energy efficiency policies could reduce overall energy use by 20 to 30 percent.

“Our research shows we’ve only begun to tap the energy efficiency potential that can create jobs, conserve energy, and save families hundreds of dollars each year,” said report author Dr. Mark Cooper, Research Director for the Consumer Federation of America. “Given its stellar record of success, it’s time for senators to view energy efficiency as a cornerstone of the nation’s climate and energy policy.”

The report outlines specific policies that would maximize the cost-saving potential of efficiency and create new jobs. These policies include a federal energy efficiency resource standard (EERS) that would require utility companies to encourage efficiency programs for customers, strengthened building codes and appliance efficiency improvements, and proper funding for “retrofitting” or improving the energy efficiency of existing buildings. Other efficiency proposals – including “BuildingSTAR,” a program that would provide tax credits for retrofitting commercial and apartment buildings – would help businesses cut costs and allow clean energy businesses to expand, putting more Americans into long-term quality jobs.

“Georgia families are letting hundreds of dollars slip through their fingers each year – money none of us can afford to waste,” Angela Speir Phelps, Executive Director and Senior Director of the Consumer Energy Program at Georgia Watch said. “It’s imperative that state leaders encourage energy efficiency as a way to help consumers mitigate increasing utility bills.”

Founded in 2002, Georgia Watch is the state’s leading consumer group advocating for Georgia’s citizens and families and working to give families a voice in critical public debates. Georgia Watch is a 501(c)(3) non-profit organization dedicated to educating Georgia consumers on the health care, insurance and financial issues that impact them. Georgia Watch promotes consumer-friendly public policy and greater protections for victims of fraud, malpractice and misinformation.

The Consumer Federation of America (CFA) is an advocacy, research, education and service organization made up of 300 nonprofits from across the United States. CFA has provided consumers a well-reasoned and articulate voice in decisions that affect their lives since 1968. CFA’s professional staff gathers facts, analyzes issues, and disseminates information to the public, policymakers, and rest of the consumer movement.

CFA Report
Report Fast Facts

“This is the result of policymakers doing nothing while lending standards went lax and perverse incentives for making bad subprime loans became the norm.” Georgia Watch Deputy Director Danny Orrock said. “The percentage of homeowners who are behind on their subprime payments needs to be a reminder to legislators that the underwriting standards for these loans need to be reformed.”

Even though Georgia ranks third in mortgage delinquencies — just behind Mississippi and Nevada — and seventh for completed foreclosures, the Obama Administration announced last week that the state will see none of the $1.5 billion in stimulus funding aimed at foreclosure prevention. That money will, instead, go to the top five hardest hit states fore completed foreclosures: Arizona, California, Florida, Michigan and Nevada.

“Banks have been bailed out to the tune of $250 billion, but neither Congress nor Georgia lawmakers have passed one piece of legislation requiring lenders to shore up their underwriting standards,” Orrock said. “Georgia Watch is pushing the legislature to keep important protections for borrowers during the home loan origination process in Senate Bill 57 as it moves through the legislature right now.”

SB 57 is common-sense foreclosure and loan origination reform based largely on bills enacted in other states. Sponsored by Senator Bill Hamrick (R-Carrollton), the Senate-passed version of SB 57 would:

• Ban prepayment penalties on subprime loans;
• Ban broker “yield spread premiums” or kickbacks on subprime
loans and FHA loans;
• Designate brokers as agents of borrowers, with fiduciary
responsibilities; and,
• Require lenders to verify borrower’s ability to repay subprime
loans, including income verification.

“It’s important for lawmakers to keep each of these provisions as they are in order to provide borrowers and potential homeowners with viable consumer protections,” Orrock said. “The current provisions of SB 57 will also help to prevent a similar housing crash of this magnitude from happening in the future.”

By the end of 2009, 13 percent, or one in eight, of the state’s mortgage-holders was at least 30 days behind on their loan. By 2012, another 350,000 homes will be lost to foreclosure and Georgia families will lose $13 billion in home equity as the result of neighboring foreclosures. As detailed in The Road to Reform, experts nationwide, including the Center for Responsible Lending, Harvard Center for Housing Studies and the Department of Housing and Urban Development, agree that a major catalyst of the housing market crash was irresponsible mortgage lending.

“In order to prevent future financial catastrophes, state legislators must enact standards on how the riskiest home loans are written,” Georgia Watch Deputy Director Danny Orrock said. “Right now, Georgia lawmakers have the chance to pass much-needed underwriting standards that will make a difference.”

As explained in the report, in 2009, a coalition of organizations helped craft and support common sense foreclosure and loan origination reform based largely on those in other states. Sponsored by Senator Bill Hamrick (R-Carrollton), Senate Bill 57 would:

• Ban prepayment penalties on subprime loans.
• Ban broker “yield spread premiums” or kickbacks on subprime loans and FHA loans.
• Designate brokers as agents of borrowers, with fiduciary responsibilities.
• Require lenders to verify borrower’s ability to repay subprime loans, including income verification.

The Road to Reform illustrates the lifeline of SB 57 and how it landed where it is today: pending passage in the House Judiciary Committee. Additionally, the report details enacted foreclosure and mortgage reform in Georgia — SB 531 and SB 141– and compiles calls for action from various community leaders and organizations.

“Georgians are asking for renewed, protective policies for the mortgage industry.” Orrock continued. “This report details the positive impact SB 57 would have by addressing the riskiest home loans. We encourage legislators to look at the facts presented here and protect Georgia families from hazardous lending by passing SB 57.”

A House Judiciary Subcommittee held hearings today and last week on mortgage and foreclosure bills, including SB 57. Among the organizations supporting the measure were Georgia Watch, AARP of Georgia, the Greater Atlanta Presbytery, and the Center for Responsible Lending. The Subcommittee, chaired by Rep. Mike Jacobs (R-Atlanta), will continue meeting over the next few weeks to prepare SB 57 for a floor vote.

To read the reports in their entirety, click the following links:
Georgia Foreclosure Crisis Part One: The Rippling Effects of Foreclosure
Georgia Foreclosure Crisis Part Two: The Road to Reform

A branch of GOCA, the Consumers’ Utility Counsel (CUC) was charged with protecting consumer interests in energy and utility matters heard before the PSC. Since its defunding in September 2008, the statutory position of CUC Director has gone unfilled. Doyle, as the Administrator of GOCA, is charged with the authority to appoint and remove the CUC Director (pursuant to O.C.G.A. § 46-10-3). Therefore, Georgia Watch believes he possesses both the authority and the duty to intervene, in the absence of a CUC Director, in cases that will financially impact Georgia ratepayers.

“Billions of dollars are on the line here and Georgians can’t continue to be under-represented in cases that will have significant impact on their pocketbooks, especially in these economic times.” Georgia Watch Executive Director Angela Speir Phelps said. “Georgia Watch would specifically like to see Mr. Doyle intervene in the Georgia Power IRP, the Atlanta Gas Light Company rate case and the Georgia Power rate case. Without such representation, the power of utilities is more likely to go unchecked and the average consumer is even more likely to see an increase in their monthly bills.”

The Georgia state legislature expressly acknowledged and codified the need of consumer representation in O.C.G.A. § 46-10-1, which states, “It is further recognized that the citizens of Georgia should receive adequate utility services at the lowest reasonable cost to the consumer while maintaining the ability of public utilities to furnish their products and services.” In the same vein, the legislature recognized that, in order for consumers to be adequately represented before the Commission, “…the commission must be furnished with all available information concerning the effects of its decisions in rate cases and proceedings before it.

As the Director of the Consumer Energy Program (CEP), McGuire will intervene on behalf of consumers in rate cases and cases involving the state’s energy portfolio heard before the Public Service Commission. Georgia Watch’s presence at these hearings will allow for more transparency at the commission, a panel of five statewide elected officials that decides billion dollar rate cases.

“Clare is one of the most respected, knowledgeable attorneys in our state,” Georgia Watch Executive Director Angela Speir Phelps said. “Her experience at the Governor’s Office of Consumer Affairs, the PSC and the Consumer’s Utility Counsel provides a strong cornerstone for the Consumer Energy Program and the consumer protection issues we work on at Georgia Watch. The residents of our state have another strong ally at Georgia Watch looking out for them.”

All told, McGuire has almost two decades of legal and professional experience in utility and energy matters that have come before the PSC. As a staff attorney at several of Georgia’s regulatory bodies, she has a vast working knowledge of the bureaucratic process that occurs within the state’s utility industry. And as an advocate fighting for fair procedure and equitable rates, McGuire has represented the interests of approximately nine million Georgians.

“Joining Georgia Watch as senior counsel and director of the Consumer Energy Program feels like a natural progression, given my background in utility, regulatory and consumer protection matters,” McGuire said. “The organization’s reputation of integrity and consumer protection precedes it. I will strive to maintain this impressive standard with my work here.”

Georgia Watch plans to formally intervene in upcoming cases at the PSC including, but not limited to, the Integrated Resource Plan filed by Georgia Power, a Georgia Power rate case, and an Atlanta Gas Light Company rate case. These cases are worth potentially billions of dollars and have far reaching impacts on our state’s economy and our environment.

Georgia Foreclosure Crisis Part One identifies irresponsible lending as a main impetus for the housing crisis. Mortgage brokers and lenders often steered borrowers into costlier loans with attractive introductory rates, while taking advantage of specific mechanisms to facilitate overcharging such as yield spread premiums (YSP), or kickbacks.

“At this point, we know Georgia’s record-breaking foreclosures not only hurt borrowers and lenders,” Georgia Watch Deputy Director Danny Orrock said. “They harm property owners whose home values depreciate as the result of neighboring foreclosures as well as local governments that are losing much needed tax revenues.”

Unfortunately, projections that Georgia will see 350,000 more homes lost by 2012 have surfaced. Georgia Foreclosure Crisis distinguishes the state’s rising unemployment rate and an influx of underwater mortgages as catalysts for the predicted increase of foreclosures in Georgia.

Other key findings in the report include:

By the end of 2009, 13 percent, or one in eight, of the state’s mortgage-holders was at least 30 days behind on their loan;
Fulton, Gwinnett and DeKalb Counties deliver the highest number of foreclosure notices in the state with a combined average of 21,865 per month;
Georgia saw 25 bank failures in 2009, the most in the nation;
Approximately one in four or 377,000 of Georgia’s 1,573,628 mortgages are “underwater”; and,
Georgia families will lose $13 billion in home equity as the result of nearby foreclosures between 2009 and 2012.

“The report paints a horrifying picture of the effects the foreclosure crisis has had on our state’s families and economy.” Orrock said. “In order to combat future catastrophe, state legislators must enact standards on how the riskiest loans are written, an issue we’ll examine with the second part of this report.”

In late January 2010, Georgia Watch will publish part two of this report which will offer policy recommendations and give detailed analyses of mortgage reform that has been enacted in other states and has proven effective in battling future foreclosures.

Click for the full report.

SB 31, which was signed into law by Governor Perdue earlier this year, forces residential and small business ratepayers to prepay for the expansion at Vogtle while excluding many big businesses. In 2011, these Georgia Power customers will see an increase of $1.30 per monthly power bill, a cost that will ratchet up each year to around ten dollars per month in 2017. These increases will occur years before the reactors produce a kilowatt of energy. Additionally, much of the increased cost will not go towards financing new reactors. A large portion of the revenues raised pursuant to SB 31 will increase Georgia Power’s total profits and pay corporate income tax for the utility.

“[SB 31] is a complicated big bill that does one very wrong thing. And that one thing is its presence in [the legislature], it doesn’t belong here.” Sen. Brown said in a speech from the Senate well on February 10, 2009. “That’s what we have the PSC for.”

The PSC, or Public Service Commission, is a regulatory body that was developed to oversee rate and fuel cases in Georgia. The PSC, which is comprised of five commissioners, is charged with balancing a customer’s need for reliable service and reasonable rates with the need of utilities to earn a reasonable return on investment.

“Sen. Brown was right: there was no need for the legislature to get involved in a matter that could be and later was dealt with by the PSC,” Deputy Director Danny Orrock said. “We commend Sen. Brown for speaking up for consumers who will have to start paying for a new nuclear power plant at least six years before it is operational.”

“This is going to cost the citizens of Georgia a lot more money than we even know,” Sen. Brown said. “This is a bad bill, in a bad place, in a bad time, in a bad way.”

Georgia Watch praises Sen. Brown for his impassioned efforts in speaking up for the average consumer and in educating his fellow legislators on the negative aspects of Georgia Power’s accelerated rate increase.

We’re in a housing crisis - one that hasn’t even hit its peek. The middle class is starting to feel the direct effects of foreclosure as the balloon that is their adjustable rate loan, bursts. That means more foreclosures to come in 2010.

By now we realize that foreclosures affect us all, not just those who default on a high-interest loan and lose their home as a result.

Our property values drop because foreclosed upon homes may stay vacant for a period of time and fall into disrepair. Our local governments then have difficulties raising revenue and enforcing the property code - meaning local economies struggle.

In order to prevent this catastrophic event from occurring again - and the free market is a cyclical machine - we need to reform lending. Plain and simple.

In 2009, state lawmakers had a chance to pass reform - they didn’t. SB 57 is up again in 2010 and we’re hoping the mistake won’t repeat itself.

By putting common sense underwriting standards into law, SB 57 will reduce foreclosures and ensure that the housing market in Georgia is stable.

Key Provisions of SB 57:

• Bans prepayment penalties on subprime loans. A high-cost loan should be a bridge to better financing, not an anchor to high-interest debt.
• Bans broker “yield spread premiums”, otherwise known as broker kickbacks, on subprime loans.
• Designates mortgage brokers as agents of borrowers.
• Requires that lenders determine a borrower has the ability to repay for subprime loans. This will help keep people from entering into loan agreements that they cannot afford to repay.

Holidays are approaching fast, just as they do every year. Its already stressful to think about buying gifts and celebrating when so many of us are truly struggling to make ends meet.

And even more families - folks that go to our churches and shop at our grocery stores - are fearful that they may not even have a house to go home to for the holidays. That’s the irony here.

Call us for more information or contact your state representative.

Most Georgians realize the impact energy bills have on their family’s budget, especially at this time of year when our natural gas bills rise. But what many may not realize is that last year, the Governor’s Office of Consumer Affairs completely defunded the Consumer’s Utility Counsel (CUC), a branch of the executive office that spoke up for average Georgians during the billion dollar utility cases being decided by the Public Service Commission (PSC).

The PSC is made up of 5 commissioners who decide all utility rate increases. While utilities have high-priced attorneys and lobbyists advocating for them, with the elimination of the CUC, no one goes before the commissioners to speak up for average Georgians. This is where we’d like to come in.
Georgia Watch is working diligently to raise money for our Consumer Energy Program so we can formally intervene in upcoming cases before the PSC and be a voice for the average Georgian.

UPCOMING PSC CASES:
• Atlanta Gas Light Company will file a rate case, chances are rates will increase.
• Georgia Power will also file a huge fuel case, and if history is an indicator, rates will increase.
• Georgia Power’s fuel case alone is worth $800 million dollars, or about $400/customer.
• Georgia Power will also file a plan in Jan. to determine how our state’s long range energy needs will be met. More coal? Green power? More nuclear? Or can we avoid the need to build costly plants by implementing more energy efficiency.

These important and potentially costly policy decisions will be decided by the commissioners. The utilities will be there, the big businesses will be there, but who will be there for you? We will, if we can raise enough money to intervene in these cases.

We need your help to do that.

Our yearly membership drive begins in November and we need you to renew your membership or be a first-time supporter of Georgia Watch. Look out for our fundraiser mailer or go to our Web site to see why Clark Howard says it’s a good idea to contribute to Georgia Watch.

We are grateful for your continued support and look forward to what we can accomplish together!

One in eight home loans is past due and on the verge of foreclosure in Georgia. Empty houses are falling into disrepair, homeowners are facing lower property values and families are turning up homeless, scrambling for shelter.

Foreclosures have a“spillover” affect, causing the value of neighboring properties to depress. The average loss to neighboring homeowners is $1,920 per home. In 2009, 1,850,583 homes will be devalued and by 2014, that number will reach 2,823,007.

Georgia Watch member Pat Edwards knows what devastating effect foreclosures have on neighboring property values. She’s seen her home’s value fall 30 percent in the last two years. Despite doing everything right, including purchasing her home without a mortgage, she can really feel and see the effects of the housing crisis.

Pat worked for the State Public Health Department and was able to grow an impressive nest egg by saving money and making prudent investments in real estate. Pat and her husband would purchase a house in need of work and use their nights and weekends to do the all the repairs. They would purchase just one home at a time, using a traditional loan with a down payment from their savings and then live in the home as they improved it.
Once the repairs were done, they would wait for the right buyer and sell it for a profit. Each sale increased their savings which would then be reinvested in another home.

Pat and her husband did this several times over the years and by the time Pat retired they had saved enough cash to purchase their retirement home outright. The home they chose for retirement was a brick ranch in a small subdivision outside of Statham, GA. The home was newly built, which meant Pat could relax into retirement without having to tackle another fixer-upper. The fact that the home was new construction and a single story meant maintenance and energy costs would be lower, allowing Pat freedom from worry about escalating energy costs now that she and her husband were living on a fixed income.

The small subdivision where Pat found her home has two streets, 36 homes and is on a rural road just outside historic Statham. In 2004, house prices in the subdivision averaged $140,000 and attracted an ethnically diverse mix of working class families, retirees and professionals.

In early 2008, Pat began to hear rumors that some neighbors were falling behind on their mortgages. One by one families in the neighborhood disappeared and, all told, 6 homes were foreclosed upon or subject to short sales, meaning a home is sold for a very low cost, just before the bank declares foreclosure.

Five of the foreclosures were on the same street. Private investment bankers and out of state banks bought most of these homes, hoping to cash in.

Unfortunately, as it turns out, out-of-state investment bankers don’t make great neighbors. Many of the homes they own have fallen into disrepair as no one is there to monitor their state. Others have turned into rental properties that are constantly being moved in and out of, with little oversight from an out-of-town, corporate landlord.

Many of Pat’s neighbors have tried to sell their homes as a result of the depreciating quality of property. However, homeowners who owe more on their mortgage than their house is actually worth are left with little choice but to stay. Pat says one neighbor has been trying to sell their home the last two years. The homeowner can’t get close to what they still owe since a house up the street sold for $88,000 after being foreclosed on.

Unfortunately for Pat and her neighbors things may still get worse:

• The Center for Responsible Lending and Consumer’s Union report that foreclosures in Georgia will continue to rise until 2012.

Now, as the result of a market that isn’t going to repair itself for quite some time, Pat is left with a hard choice. She can stick it out, hope things change and risk even more depreciation, or sell now and take a devastating hit to the cash investment she made in the house.

Even with tough choices looming, Pat remains optimistic and knows she and knows she and her husband are actually quite lucky.

“Our CPA and some friends told us we should invest in the stock marker rather than a home. Then we would really be in dreadful shape. We could have lost all the money and have no where to live.”

How could things be different? The leading factor for foreclosure is homeowners defaulting on subprime loans. While the subprime market represents just 13 percent of all outstanding loans in Georgia, subprime foreclosures accounted for 40 percent of the total number of Georgia foreclosures in the first quarter of 2009. Georgia Watch believes more stringent home loan lending practices will help.

Georgia Watch is supporting SB 57, which would take measures to prevent another housing crisis and bar irresponsible lending practices. SB 57 would strengthen income verifications requirements, stop broker kick backs for higher interest loans and ban prepayments penalties.

If you would like to take part in pushing for these changes please call us at 404-525-1085. To share your story, contact Jeannine Malone at (404) 525 1085.

Georgia Watch is keeping a keen eye on Atlanta Oculoplastic Surgery, P.C. v. Betty & Bruce Nestlehutt at the State Supreme Court that is challenging the cap on non-economic damages in the 2005 tort reform law. Non-economic damages are appropriate in cases where the jury wishes to compensate the injured party for harm that goes beyond lost wages or work opportunities. Pain and suffering, loss of normal marital relations (consortium), and physical injury or disfigurement are all non-monetary losses that fit in this category. Not surprisingly, amounts of non-economic damages can vary widely among cases and jurisdictions.

The Nestlehutt case involves a 71 year-old woman who sought the services of a plastic surgeon. Having discussed a range of procedures with Mrs. Nestlehutt, the doctor recommended that she undergo both a full facelift and laser resurfacing simultaneously despite the significant risks that this posed to a patient of her age. Serious problems soon arose. The two procedures drastically reduced the blood flow to Mrs. Nestlehutt’s face, and her skin was severely damaged. Tragically, the ordeal left her permanently disfigured.

The jury returned a verdict in favor of the Nestlehutts in the total amount of $1,265,000, most of which constituted non-economic damages: $900,000 for Mrs. Nestlehutt’s pain and suffering and $250,000 for Mr. Nestlehutt’s loss of consortium. The defendant Oculus contended that this was a misapplication of Georgia law and that the total amount of the Nestlehutts’ non-economic damages should be capped at $350,000, thus resulting in a total judgment of $465,000. The trial court refused this interpretation and struck the law down as unconstitutional. The defendant Oculus then appealed to the Supreme Court of Georgia.

Georgia Watch submitted an amicus brief in this case arguing that the law violates the prohibition in the Georgia constitution against “special laws” that grants status or privilege specifically to a favored group (such as healthcare providers). We have consistently been opposed to caps because this law favors certain groups over others. People who have a higher wage-earning potential – such as lawyers, doctors, and business executives – stand to receive a considerably higher amount of total damages than someone with a smaller income. Caps mean that the life or well-being of a person who is retired or whose work does not earn a salary, such as a homemaker, will be valued considerably less by a court.

Beyond placing a value on human life, Georgia’s caps provision bars access to the courthouse for some individuals. If a person cannot find a lawyer willing to take a case which will be arbitrarily capped by law, then they have effectively been shut out of the civil justice system. This amounts to a violation of the Seventh Amendment in the Bill of Rights, which guarantees every citizen a right to trial by jury for civil disputes over $20.

Georgia Watch will continue to fight for the patient who has been injured or killed through no fault of their own. Please stay tuned to Georgia Watch and our Court Watch program for info on how the Nestlehutt decision impacts your family.

The flooded streets and damaged homes resulting from the storms that pummeled the state in September should serve as a wake-up call to us all. Some of you may be asking: Why didn’t I know my property was vulnerable to flooding? Why had I never thought to purchase flood insurance? Many of us now know whether or not to purchase flood insurance, however countless more remain in the dark.

We all know Georgia gets so humid in summer that walls sweat and hair frizzes, but in terms of rainfall, it’s been pretty dry in recent years. In the past decade, we’ve been plagued with droughts and water restrictions, so shopping around for flood insurance wasn’t necessarily a priority.

However, major development, like we’ve seen across the state, often alters hydrology and may bring new areas into the flood plain. And as a result, the flood plain maps become outdated.

The Federal Emergency Management Agency (FEMA) is the organization in charge of re-drawing the flood plain maps. However, the process can take years. And, unfortunately, even if FEMA alters a map there is no guarantee that affected homeowners will know their property is suddenly at risk of flooding since Georgia has no notification requirements.

One solution to this problem is House Bill 169, sponsored by Rep. Buddy Carter, R-Pooler. This legislation would require the Georgia Department of Natural Resources, which is notified by FEMA if changes are made to the state’s flood plain, to alert property owners whose land is affected.

If the legislature passes HB 169, Georgia’s homeowners will have the benefit of the most up-to-date information on flooding risks in their area.

This is imperative when deciding whether or not to purchase flood insurance – insurance I know many of my neighbors wish they would have had as they watched flood waters and debris wash into their homes this past September.

SB 31, which was signed into law by Governor Perdue earlier this year, forces ratepayers to foot Georgia Power’s bill for the expansion at Vogtle while excluding many big businesses. In 2011, ratepayers will see an increase of $1.30 per monthly power bill, a cost that will ratchet up each year to around ten dollars in 2017. These increases will occur years before the reactors produce a kilowatt of energy. Furthermore, Georgia Power shareholders stand to make a billion dollar profit from the financing scheme.

“Senator Williams authored a key amendment to Senate Bill 31, which ensures that Georgia Power’s income received from early financing of nuclear plants is properly accounted for,” Georgia Watch Deputy Director Danny Orrock said. “This takes away an incentive for Georgia Power to over-earn on prepayments for Plant Vogtle and future nuclear construction.”

Sen. Williams’s amendment requires Georgia Power to record costs associated with Vogtle’s expansion in the company’s overall accounting. The utility intended to have the accounting for the two new reactors set apart from their overall company accounting, which is regulated to keep profits within a specified range. In the original language of SB 31, Georgia Power could have kept excessive profit from the financing and construction at Vogtle, with the Sen.’s provision they must balance it with their overall company revenue.

“With the passing of SB 31, Georgia Power was written a blank check that will come out of the pockets of rate-payers,” Georgia Watch Executive Director Angela Speir Phelps said. “The only silver lining of that very dark cloud is Sen. Williams’s pro-consumer provision – we commend him for standing up for the average Georgian.”

Sen. Williams is the chairman of the Senate Committee on Assignments and the vice chairman of the Senate Finance Committee. He also sits on the Senate Administrative Affairs Committee, the Senate Appropriations Committee, the Senate Reapportionment and Redistricting Committee, the Senate Regulated Industries and Utilities Committee and the Senate Rules Committee.

At first blush, it might seem that Angela Speir Phelps made a radical career change this year when she moved from utility regulator to consumer advocate. Full article.

Foreclosure Projections 2009- 2012: 348,343

Total Foreclosure starts 2008 - 2009:  117,352

Total Foreclosure sales 2008-2009: 48,131

Total past due mortgages 2Q 2009:  243,084

Change in foreclosure starts from 2006-2009: 141.7%

US lost home equity as result of nearby foreclosures 2009 – 2012: $1.9 trillion

GA lost home equity as result of nearby foreclosures 2009 – 2012: $1.3 billion

Number of homes experiencing foreclosure related decline: 2,823,007

Georgia average loss per home affected: 4,657

Number of Georgia’s 1,573,628 mortgages “underwater” or
homeowner owes more on mortgage than home is worth: 376,954

Number of mortgages 5% away from being “underwater”: 130,616

2. Projected foreclosures on all types of loans during the next 5 years: 13 million

3. Portion of all homeowners late on their mortgage: 1 in 10

4. Portion of homes where owners owe more than property value (“underwater”): 1 in 5

5. Drop in residential lending from 2008 compared to 2007: over a trillion

6. Between 2006 and 2008, % decline in existing home sales: 24%

7. Between 2006 and 2008, % decline in new home sales: 54%

8. Between 2006 and 2008, % decline in new construction: 58%

9. In 2009, number of neighboring homes that will lose property
value because of nearby foreclosures: 69+ million

10. Average price decline per home (2009): $7,200

11. Total property value lost because of nearby foreclosures (2009): $502 billion

12. Percentage of 2006 subprime loans that went to people who could have qualified for prime loans with better terms: 61%

13. Typical rate difference between a 30-year, fixed mortgage and the initial rate of aggressively marketed ARM loans: half to 8/10%

14. Cumulative default rate for recent subprime borrowers with a similar risk profile to borrowers with lower-rate loans: more than 3x higher

15. During first four years of a loan, the typical extra cost paid by subprime borrowers who get a loan from a mortgage broker, compared to other borrowers with similar characteristics: $5,222

SB 57 addresses financial incentives that brokers and others use to guide borrowers into unsuitable loans. The bill helps prevent factors that contributed to meltdown in the subprime market.

Specific provisions:

1. Bans prepayment penalties on subprime loans. A high-cost loan should be a bridge to better financing, not an anchor to high-interest debt.
2. Bans broker “yield spread premiums” (aka broker kickbacks) on subprime loans.
3. Designates mortgage brokers as agents of borrowers.
4. Requires that lenders determine that the borrower has the ability to repay for subprime loans. This will help keep people from entering into loan agreements that they cannot afford to repay.
Stability for the Future:

This legislation is meant to protect buyers and neighborhoods. The point of SB 57 is to restrict lending practices that are either by intent or effect predatory.

Foreclosure is bad for the borrower and the lender, and also hurts neighborhoods by leaving properties vacant and reducing home values. Local governments then have difficulties raising revenue and enforcing the property code. By putting common sense underwriting standards into law SB 57 will reduce foreclosures and ensure that the housing market in Georgia is stable.