Despite concerns about its impact, some legislators are pushing for a nationwide moratorium on all foreclosure sales.
U.S. Rep. Edolphus Towns, a New York Democrat and chairman of the House Committee on Oversight and Government Reform, says the top 10 mortgage lenders should immediately suspend foreclosure proceedings in all states.
“The implications of ignoring the foreclosure problems are far too great to be ignored,” he said Friday.
Other legislators are moving to revive cramdown legislation, which would give judges the power to reduce mortgage principal to market value in bankruptcy cases. The controversial bill had passed the House earlier but was stuck in the Senate.
But the Mortgage Bankers Association of America and the Financial Services Roundtable said Friday in a joint statement that, after reviewing paperwork, nearly all bank foreclosures are legitimate.
“Calls for a blanket national moratorium on all foreclosures are a bad idea and would cause significant harm to communities at risk, the unstable housing market and the fragile economy,” the statement said.
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