Banks have recently begun halting foreclosures in certain states after allegations surfaced that bankers were falsifying data to speed up action against pennyless homeowners. This comes years after the same bankers falsified data to get those homeowners their shitty loans in the first place. So, yes, there's a special place in hell for these lenders, a place where there's only one bar and it doesn't even have NFL Sunday Ticket.
With the foreclosure scandal growing, Funkhouser joined local advocacy group Communities Creating Opportunity in asking Missouri Attorney General Chris Koster to stop banks from foreclosing. Kansas City hasn't been as ravaged by foreclosures as some places (Vegas, parts of California, Cleveland),
but the problem has taken its toll: of 10,000 homes vacant in the city,
3,000 are owned by banks, Funkhouser said, according to the Star. "The market is broken at the moment, and we need to take time to repair it," he said.
But whether temporarily banning all foreclosures is the solution is up for debate. Wall Street is against a national moratorium (rather obviously), and their concern seems logical. "It would be catastrophic to impose a systemwide moratorium on all
foreclosures and such actions could do damage to the housing market and
the economy,'' Wall Street's biggest lobby said, according to the Boston Globe. "The mortgage market, investors,
and the health of the economy are all inter-related.''
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I'm guessing that the lenders are assuming that the borrowers think, "If there's no risk of going into foreclosure and losing my house, why make payments?" But that's a whole lot of assumption right there.
After unsuccessfully trying to purchase a foreclosed home last year and seeing how poorly prepared the banks are to sell homes, I have no idea why they'd want to take on more foreclosures.
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