Calls Increase For National Foreclosure Moratorium

The foreclosure crisis may hit full speed just in time for the November midterms as Senate Majority Leader Harry Reid (D-Nev) today called on major lenders to halt foreclosures nationwide.  The announcement occurred literally minutes after Bank of America announced it was suspending foreclosure sales to assess it’s own entanglement with firms that had executed fraudulent affidavits in support of lenders efforts to remove homeowners and sell foreclosed properties.

Bank of America may be trying to get ahead of the narrative as Senator Christopher J. Dodd (D-Conn) also announced that the banking committee will hold Congressional hearings beginning Nov. 16 to wade into the foreclosure fraud allegations.

Bank of America’s announcement makes it the first bank to put a hold on foreclosures in all states.  Several other banks had made similar decisions, but on a state-by-state basis.  It’s unclear whether others such as JPMorgan Chase would follow suit.

A national moratorium is the best thing that can happen right now.  There is overwhelming evidence that suggests a widespread and systematic failure in the foreclosure process.  There is a very real possibility that homeowners were improperly thrown out of their homes or not given an opportunity to redeem loans that were in fact salvageable.  Hearings and investigation can get to the tip of the problem of just what were the banks and loan processors doing, but we need to be prepared for the potential ripple effect from their actions, including the possibility that thousands of other homeowners who think they own properties in fact do not because the foreclosed owner was illegally evicted. 

In short, this mess is no where near finished.

photo courtesy of TheTruthAbout... via Flickr

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Carlo N.
Carlo N.5 years ago

Walter I appreciate what you are saying, however the republicans let this happen under a Republican President, Congress and Senate. To vote them back in would be rewarding them for screwing us, and that I can not do. I would rather send them a warning, to act in our best interest instead of the banks or else we will elect an Independant to take their place, never the party who put us here.

Walter G.
Walter g.5 years ago

Congress has done nothing for us, so on election day lets reciprocate, and return the favor. Let us do nothing for the incumbents.

Walter G.
Walter g.5 years ago

lets call a moratorium on congressional incumbents, Freddy and Fanny, and current banking injustices in general. The real estate industry started this mess, then crawled out from under the pile of fallout which resulted. What you are seeing now, for those of us still awake, is not the problems of a greedy, money grasping machine, it is the demise of the middle class. Our former middle class now live in tent cities or other assisted shelters, or their family cars, and are on a social order level with European Gypsies. Obama may have magically turned off a switch and seemingly caused oil to vanish from the gulf, Bush used the same switch to declare the war over, but neither can sweep the former middle class under the rug. NOVEMBER is almost here!

Ch H.
Past Member 5 years ago

Carlo - I work for one of these banks (not too proud of it) and unless you are dealing with bank invested properties the banks/mortgage companies have to handle foreclosures the way Freddie and Fannie tell them...they only service loans for Fannie and Freddie along with the loans they backed.

I also wish the banks would have more people and time to sit with each customer and go over their financials but they dont and way too many people are loosing their homes.

Ann L.
Ann L.5 years ago

Non-"big banks" have instantly finalized foreclosure procedures for all those '"mortgage-backed securit[y]ies" [and is] part of a package security bought by Deutsche bank and as such is not a mortgage held by an actual bank' so as to cash out before any moratorium or federal/state action. That after months of documented runaround for those like my daughter, who is on disability.

Morgan G.
Morgan Getham5 years ago

Calls increase. Except guess who says "no"? That's right. Your President and mine, Barack Obama. Apparently, a notional moratorium is not needed.

Doesn't that just fill you full of warm fuzzies?

Marilyn L.
Marilyn L.5 years ago

Thanks for the article.

Carlo N.
Carlo N.5 years ago

Ch H, if the banks weren't so greedy and would negotiate with people maybe they wouldn't be in the trouble they are in. My bank was orderd by a Judge to sit down with me and negotiate, instead they refused. I am more then willing to meet them halfway, instead it has to be their way or no way. Thats why they are in so deep, because they are either to greedy or to stupid to do the right thing.

Carlo N.
Carlo N.5 years ago

It is my firm belief that the second largest reason the Democrats may lose this November is because they broke their promise to help homeowners who were facing forclosure, instead they helped the banks. And when wave after wave of forclosures hit, and people were beging for the government to stand behind their word, they turned their backs and let the banks have their way, as a result millions are losing their homes to the banks that caused the problem. Now the homeowners they let down want to show them what happens when you break your promise, they replace you, and still they can't understand why they are losing in the polls. The republicans are not for the homeowners either, and so most of us are looking for Independants or anyone that will stand up for us. I respect the President, but I also feel he let me down. And as a result of an arm that at one point went to 10.5% interest, and the value of my home falling from 237,000 to 90,000, and a bank that refuses to negotiate, I am one of those people who will shortly be homeless. I will lost the 30,000 and 5 years I put into it. I truly feel the people I voted for, that said they were going to stop this madness from happening, let me down

Lisa Zarafonetis
Lisa Zarafonetis5 years ago

I love it when the self righteous fall!!!