Opinan que congelamiento de ejecuciones hipotecarias perjudica la ya debilitada economía

Our views: The crisis continues.

Foreclosure moratorium would hurt the still struggling economy

Florida Today editorial
October 21, 2010

During the real estate bubble, lenders wrote mortgages like they were giving away candy on Halloween.
Their irresponsibility nearly sank the economy and now they’re repeating it as the foreclosure crisis continues.
Attorneys general in all 50 states are starting a coordinated probe into inaccurate and fraudulent documents prepared by lenders and their subcontractors in foreclosure suits.
Federal investigators are doing the same.
The problem involves untrained mortgage company and law firm workers who signed hundreds of documents a day without reviewing them, violating laws that require a signed affidavit saying all documents filed were complete and accurate.
As a result, experts say an untold number of people may have been forced from their homes illegally.
Some of the nation’s largest lenders, such as Bank of America and JP Morgan Chase, put a temporary halt on foreclosure sales to address the problem, with the effect rippling along the Space Coast: Brevard County courts, which currently are handling nearly 13,000 foreclosure suits, are reporting a growing number of foreclosure hearings canceled or postponed. The figure reflects just part of the Space Coast’s crisis, where 30,000 foreclosure suits were filed between January 2007 and September 2010.

The situation is raising calls from consumer groups and some lawmakers for a national moratorium on foreclosures until the legal issues are probed and settled.
At a gut level, the anger is understandable. But it would be the wrong approach, further hurting the economy as it struggles to recover from the Great Recession.

Space Coast impact
The hard truth is the economy is not going to rebound until the housing debacle is resolved, and the only way for that to happen is for the foreclosure system to remain at work, despite its problems.
Absent that, the situation could become far worse.
A moratorium would freeze the sale of foreclosure properties and could bring the crippled housing industry to a standstill, with a snapshot in Brevard showing the consequences:
Foreclosure sales have accounted for one-third or more of all sales along the Space Coast in recent months.
There’s also little evidence that homeowners who are making their payments are being unfairly targeted for eviction.
The banks, however, should not walk away from their latest fiasco unpunished.
The attorneys general should be relentless in their investigations and the courts should hold the banks fully accountable.
Federal law enforcement officials also said Tuesday they are examining whether financial firms broke federal laws when they filed fraudulent court documents to seize people’s homes.

Lawmakers must help
Beyond that, lawmakers in Congress — including those from Brevard and Florida heading to Capitol Hill after the election — should support new laws that give homeowners a better shot at reworking their mortgages so they can keep making payments and stay in their homes.
Banks are still failing miserably on that front, throwing people on the streets who don’t need to be there and making it hard on others taking steps to avoid trouble.
One is Donna Ditto of Palm Bay, who is not in foreclosure but has been trying to modify her mortgage with JP Morgan Chase since June.
The process, she told FLORIDA TODAY, is a nightmare of delays and conflicting information.
“I have sheets and sheets of paper where I take every name, every time for every person I talk to. It’s been hell, it really has . . .I am about at the end of my rope right now,” she said.
Consumer groups are offering proposals that Congress should approve, including reforming bankruptcy laws so homeowners could go to the courts to modify their loans if they’re having no luck with the banks.
The Obama administration should also change the refinancing guidelines in its antiforeclosure plan so homeowners current in their payments are eligible to refinance at more affordable rates, even if their homes have dropped in value.
The banks have proven again they can’t be trusted to get it right, leaving it to Congress and White House to take more forceful action.