Some consumer groups are clamoring for a nationwide foreclosure moratorium, however the powers that be oppose such a move. A foreclosure moratorium has not been declared, but numerous mortgage loan companies have imposed what amounts to a voluntary moratorium by suspending foreclosure proceedings on their own. A fragile real estate industry crawling toward recovery could be badly hobbled by a foreclosure moratorium, according to industry experts and government policymakers. Source for this article – Experts: Foreclosure moratorium will harm weak housing market by Personal Money Store.
Probably not a foreclosure moratorium in the near future
There isn’t much of a chance that a foreclosure moratorium will take place, even though the news keeps talking about it. The response by mortgage lenders and government officials to the shoddy, shady practices of the mortgage servicing industry has already stopped foreclosure proceedings across the U.S.. Based on ABC News, United States of America loan companies were signing foreclosure documents right and left. The companies would not even take the time to take a look at them. The foreclosure documents were not read at all when the mortgage servicing employees really signed the documents. As a result, JPMorgan Chase, Ally Financial’s GMAC, Bank of The United States and Goldman Sachs have suspended tens of thousands of foreclosures. Financial institution of America, the largest United States of America lender, has suspended all United States foreclosures.
Negative impact of a foreclosure moratorium
The mortgage servicing industry is being investigated by the attorneys general in 40 different states. During this time, there is a large consensus amongst government officials and real estate industry specialists that say it would hurt to have a foreclosure moratorium. The delay on 30 percent of homes in the housing sector getting foreclosed on will hurt the economic recovery severely, reports ABC News. This is what Lawrence Yun, chief economist for the National Association of Realtors, said. He explained that foreclosures have to get off the market rather than just sit there. This is how the economy will heal naturally. Bloomberg reported that Treasury Secretary Timothy F. Geithner told Charlie Rose a foreclosure moratorium would leave homes empty longer and further drive down real estate prices.
Advantages of foreclosure moratorium are restricted to certain people
Any homeowners being foreclosed on would probably do much better if a foreclosure moratorium were put into action. Homes being foreclosed typically have not made payments in over 18 months though, according to Kelly Campbell at United States News and World Report. Individuals could just get to stay in their homes for free longer with a foreclosure moratorium. But buyers who have put money down and are waiting for the paperwork to go via are left high and dry. Also, banks can’t get their collateral as they’re servicing the bad loans still. Homeowners and taxpayers would probably rather get new regulations and more bailouts by paying higher taxes and fees in order for things to get better, claims Campbell.
Citations
ABC News
abcnews.go.com/Business/nationwide-foreclosure-probe/story?id=11864199 and page=2
Bloomberg
bloomberg.com/news/2010-10-13/geithner-says-foreclosure-moratorium-would-be-very-damaging-.html
U.S. News and World Report
money.usnews.com/money/blogs/the-smarter-mutual-fund-investor/2010/10/13/who-loses-in-a-foreclosure-moratorium
No comments:
Post a Comment