A Moratorium on Foreclosures?

The Leadership of the Congressional Black Caucus has called on President Obama to implement a moratorium on foreclosures in the wake of information showing that mortgage lenders and servicers improperly foreclosed on people:

“It is unconscionable that in the wake of these revelations, and in the midst of a continuing housing crisis, banks and the mortgage servicing industry have been found at fault for further misconduct in processing the foreclosures that have cost millions of families across the nation their homes,” said Congresswoman Lee. “The Federal Government has a responsibility to protect American homeowners from losing their homes due to processes that are unfair or tainted by fraud.”

Congresswoman Waters said, “The foreclosure crisis has affected millions of American families in every region of our country and has especially impacted minority homeowners who were targeted by predatory lenders.  The nation’s mortgage servicers are not doing enough on a voluntary basis to help homeowners – and in fact we have learned that some of them are engaging in fraud in order to rush through foreclosures.  Congress, the Administration and state officials must all take action to keep the mortgage servicing industry honest and to protect homeowners.”

Congressman Bobby Scott of Virginia’s 3rd Congressional district, that includes the City of Richmond, is a member of the Congressional Black Caucus. Recent news has shown how foreclosures have gone up in the Richmond area. I haven’t seen any news or releases from his office regarding his stance on these foreclosure errors.

Unfortunately, Congressman Eric Cantor, representing Virginia’s 7th Congressional district (which includes part of the City of Richmond as well as the Counties of Henrico and Chesterfield) has come out opposing a moratorium on foreclosures. Congressman Cantor says people must take responsibility for themselves. It’s definitely true that if someone stops paying the mortgage, they can expect to be foreclosed upon. However, the mountain of evidence showing how lenders and servicers foreclosed on people without looking at the paperwork and, in many cases, foreclosed on people who were paying in full and on time, shows that we have a real need to step back and take a detailed look at the process.

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