6.20.2013

Foreclosure Moratorium Is Still A Hot Topic

The number of home foreclosures has been rising and rising for years now, and while all fifty states intensify their efforts to suppress the incredible rise in foreclosures, there is still one prominent group that believes the Federal Government should do no more. President Barack Obama and White House officials have stated that necessitating a nationwide prohibition on foreclosures would not solve the problem. Rather a moratorium of that standard would likely backfire and drive the housing market even farther downward. All in all, a nationwide prevention of foreclosures is more likely to create even more foreclosures as additional homeowners continue to find themselves in financial turmoil and unable pay their mortgages.

The hardest hit areas of the country, like Los Angeles and most of the rest of California, where foreclosures account for roughly forty percent of home sales, are believed to be the most susceptible to hurt the housing market if foreclosures are made illegal. Housing and Urban Development Secretary Shaun Donovan has stated that this could in fact delay the recovery of the housing market for an indefinite length of time. Whether or not it would ever recover is unknown at this time. An important federal regulatory agency expressed that they believe lenders need to verify their foreclosure processes, quickly fix any problems and report potential fraud to the authorities. Apparently it is believed that the lenders causing the problems are actually able to fix it.

The Federal Housing Agency made a point of stressing the idea that foreclosures on aberrant homeowners should proceed without delay. Delays in foreclosures add cost and other burdens for communities, investors and taxpayers." The Federal Housing Agency is responsible for regulating seized mortgage financing giants Fannie Mae and Freddie Mac.

Donovan is not alone is his stance, many other administration officials have resiliently called for the immediate rectifying of any and all improperly conducted foreclosures. In addition they are asking for the urgent noting of any and all ongoing inquiries by federal regulators and the Justice Department. The White House staff has made a point of publicly praising the state-by-state efforts towards fully investigating the problem.

Other voices outside of the White House are adamant about stopping foreclosures. They are saying that the banks and lenders have been repeatedly taking too many shortcuts and practicing illegitimate tactics in seizing homes from their delinquent borrowers. Then on Wednesday, the attorney general of each of the fifty states collectively announced their own joint investigation into exactly how lenders have verified their foreclosure documents.

Major lenders like Bank of America Corporation, JPMorgan Chase & Company, and Ally Financial Incorporated will have their disclosures probed, poked and prodded to determine if the foreclosures have been enacted illegitimately or not. Iowa Attorney General Tom Miller is leading the way and specifically calling for the possibility of robo-signers to be investigated. Robo-signers are bank and lender employees that have vouched for the complete accuracy of foreclosure documents without ever actually reading them. Miller has made it clear that this process is in no way designed to keep Americans in their homes: this is not a silver bullet to keep millions of Americans in their homes. Miller added that this is an occasion to right the process and the law accordingly. Miller also believes the majority of the problem lies within individual state laws, and thus finds it quite appropriate that the states are each playing their own character in the process. Miller has asked that instead of imposing fines on banks and lenders discovered to be guilty, that the money be utilized in a way to lower homeowners monthly payments.

On the other side of the coin is Los Angeles Democratic Representative Maxine Waters, reiterating her call for a nation-wide moratorium. Waters is one of many lawmakers and advocacy groups that continue to push the administration to do more to ease the suffering of offending homeowners. John Taylor, president of the National Community Reinvestment Coalition said: Let's take a step back, take a deep breath and figure out what is the fairest, kindest, most gentle way of dealing with millions of homeowners facing foreclosure." Taylor and other board members met with the Federal Reserve Chairman Ben S. Bernanke and other members of the Feds Board of Governors on Wednesday to push the moratorium.

All in all Taylor and his counterparts have been severely disappointed with President Obamas lack of action. They believe that even a temporary halt in foreclosures would at least be immediately beneficial.




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