More Moronic Moratorium Maneuvering
Bank Lawyer’s Blog:
Chris Dodd is on board with his feckless leader in calling for a federally-mandated 90-day foreclosure moratorium.
Dodd spoke at the annual conference of the Connecticut Housing
Coalition in Hartford. He said people facing foreclosure deserve a
time-out from the process.
"I'm willing to do whatever it
takes to stop the foreclosure crisis in its tracks," Dodd said. "It's
the right thing to do economically."
Actually, no it isn't. Housing Wire today ran an article about California's various legislative efforts to "stop the foreclosure crisis in its tracks." They've certainly reduced foreclosures, for the time being at least. The crisis, however, lingers.
California State Senate Bill 1137, which went into effect Sept. 8,
imposes significant new requirements on lenders prior to filing for
foreclosure ??? including the requirement that servicers contact
homeowner borrowers to explore options for avoiding foreclosure on
their primary residence at least 30 days before filing a notice of
default.
According to ForeclosureRadar, which tracks and publishes information concerning loan defaults and foreclosure filings, both notices of default and foreclosure filings have dropped dramatically.
"CA State Senate Bill 1137 has rendered analysis of current activity against prior foreclosure levels useless in understanding market conditions," said Sean O???Toole, founder of ForeclosureRadar. "What is important to watch now, is how quickly lenders and trustees adjust to the new law. While it is unlikely foreclosures will return to previous levels, given the new requirements, we expect SB 1137 to have no long term impact beyond delaying the foreclosure process for homeowners, and slowing the overall recovery."
[...]
"Given the significant negative equity now occurring in most California foreclosures, modifying loans to affordable levels either requires large principal balance reductions, or extending the unsustainable teaser rates that created the foreclosure crisis in the first place," O???Toole contended.
"Wide scale adoption of large principal balance reductions…