A Possible Moratorium on Foreclosures

Looking at potential ripple effects should foreclosures be halted, temporarily

Wednesday, October 13, 2010

At least 40 states' attorneys general across the country will launch an investigation into the mortgage servicing industry today, which will possibly result in a push for a national moratorium on foreclosures. If they do, it comes as a response to recent announcements by several major banks, who admitted submitting fraudulent or erroneous documents in their foreclosure programs as they worked through massive amounts of foreclosure paperwork.

 

Even though the White House has said it wouldn’t back a national moratorium, we wanted to explore the ripple effects that such a move would have on the housing and lending markets. Chris Mayer, senior vice dean of Columbia Business School and Paul Milstein Professor of Real Estate, says a moratorium alone might not cause too many problems. But if the attorneys general decided to legally challenge the way foreclosure sales are securitized, the entire housing industry could, theoretically, screech to a halt. Dave Halpern, a real estate agent at Louisville Short Sale Experts, gives the perspective from the real estate industry.

Guests:

Dave Halpern and Christopher Mayer

Produced by:

Jen Poyant

Comments [1]

Kevin Brown from Miami

The story that no one is reporting is why lenders have encountered such drastic paperwork problems. The answer is that lenders were intentionally avoiding state taxes and recording fees which were due each time they resold mortgage loans by not properly documenting the transfers. These taxes and fees amount to billions of dollars lost to state government. Any effort by federal or state officials to help mortgage lenders out of this mess will simply legitimize a banking industry run rampant.

Oct. 13 2010 09:32 AM

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