Temporary moratorium on foreclosures?

[eridani]

http://www.nytimes.com/2010/10/15/opinion/15krugman.html?_r=1

What can be done?

True to form, the Obama administration’s response has been to oppose any action that might upset the banks, like a temporary moratorium on foreclosures while some of the issues are resolved. Instead, it is asking the banks, very nicely, to behave better and clean up their act. I mean, that’s worked so well in the past, right?

The response from the right is, however, even worse. Republicans in Congress are lying low, but conservative commentators like those at The Wall Street Journal’s editorial page have come out dismissing the lack of proper documents as a triviality. In effect, they’re saying that if a bank says it owns your house, we should just take its word. To me, this evokes the days when noblemen felt free to take whatever they wanted, knowing that peasants had no standing in the courts. But then, I suspect that some people regard those as the good old days.

What should be happening? The excesses of the bubble years have created a legal morass, in which property rights are ill defined because nobody has proper documentation. And where no clear property rights exist, it’s the government’s job to create them.

That won’t be easy, but there are good ideas out there. For example, the Center for American Progress has proposed giving mortgage counselors and other public entities the power to modify troubled loans directly, with their judgment standing unless appealed by the mortgage servicer. This would do a lot to clarify matters and help extract us from the morass.

One thing is for sure: What we’re doing now isn’t working. And pretending that things are O.K. won’t convince anyone.

[OHdem10]

1. The Banks themselves are putting a freeze temporarily while they

sort out any problems. This is going on in all the states.

A Moratorium would stop current transactions and sales and slow
down the economy making recovery even longer.

[lob1]

2. Yes, but it's not right to let banks foreclose on

houses they don't even own. They made money by chopping up the morgages and selling them, so they're trying to collect twice on the same debt, and they don't even hold the papers anymore. If I did that, I'd be a crook. I don't see why they should get away with it.

[OHdem10]

3. I believe this is what they are sorting out. Making sure each

mortgage is written up with all ts crossed and the is dotted.
They cannot charge twice.

[lob1]

4. I hope so. I understand the administration doesn't want

a moratorium on the foreclosures. That's okay if it means "Let's sort things out and see who owns what", but not so okay if it means to just let the banks keep foreclosing.

[madrchsod]

5. wells fargo is`t going to stop.

around here at least 20-25% of foreclosures have been wells fargo. we tried to get a mortgage from them but they turned us down.... i guess wells did`t like the 30 thousand we had to put down on a 90 thousand house. our local savings and loan had no problem and the problems we have had they worked with us.

[jtuck004]

6. It would be in the best interests of the banks to get this figured out.

Even if they foreclose, they would have to sell properties with clouded titles at a substantial discount.

And if they sold it, who would insure the integrity of the title?

Not bad enough that the investment banks leverage all these loans on the back of so much debt,
but to then break all the title chains because they thought they were above the regulations
that governed all this.

Or maybe they just didn't care, since the government has been bailing out their bad decisions for so
long it has warped their judgment.