A lot of things are pointing to blanket stoppage of all home foreclosures: one is the recent move by Bank of America to freeze foreclosures in all 50 states and the other is the upcoming November 2 midterm elections where people will surely think about the reeling economy when they vote. However pressing these two events may be, a top White House adviser thinks that there is no need to halt all foreclosures.
White House Senior Advisor David Axelrod said last Sunday, “It is a serious problem. I’m not sure about a national moratorium because there are in fact valid foreclosures that probably should go forward.”
Axelrod reiterates that White House is doing something about the problem, urging lenders to come up with the reviews on flawed documentations as soon as possible. He adds that the administration is hoping the investigation into what has become known as “robo-signing” will move rapidly.
The fast-approaching midterm election sure has people thinking about economy, with foreclosures and evictions becoming top political issues in voters’ minds. Lawmakers, involved in a tight race, are now taking opposing sides.
Top House Democrat Rep. Debbie Wasserman Schultz of Florida says she is backing the foreclosure moratorium. She adds that the government should talk to banks regarding reshaping ‘troubled’ mortgages.
Even Senate Majority Leader Harry Reid, D-Nev. has sought out the five large mortgage lenders and asked them to freeze foreclosures in his state. He said the homeowners in his state should be treated the protection from foreclosure until such time that the lenders find a way to ensure that no home will be properly foreclosed.
No. 2 House Republican Rep. Eric Cantor of Virginia takes the opposite side. He said that any moratorium would shed the lenders of their rights and protection. For him, resorting to a blanket stoppage of foreclosure will kill the housing industry.
Attorney General Eric Holder reiterates that the administration is already looking into the matter, with Democratic lawmakers urging the Justice Department and bank regulators to probe whether mortgage servicers indeed violated foreclosure handling laws. Soon, a joint investigation by attorneys general in 40 states will be launched.
GMAC Mortgage, JPMorgan Chase & Co., and PNC Financial are yet to decide whether they will follow Bank of America’s move to suspend foreclosure sales in all 50 states. Meanwhile, President Barack Obama has just vetoed a bill that would have made it easier to approve foreclosure documents by banks.
The story just gets crazier and crazier as the political cycle and pandering efforts keep molding our investing market. This Robo-Signing business threatens to reinforce the unsustainable dam that is holding back the growing shadow inventory extending it into NoD territory.
This news gets our market onto the right track and will bring on the flood of deals sooner than later (it’s inevitable), anything else is just stalling that poisons in economy and the investors are the antidote.
Keep up the great work!