‘Blizzard of Foreclosures’
courtesy of ‘Photos by Chip Py’
Eleanor Holmes Norton today called for a moratorium on foreclosures due to malfeasance at national banks concerning the documentation surrounding many mortgages. Citing specifically J.P. Morgan Chase, Bank of America and Ally Financial, the District’s delegate to Congress requested a moratorium “until they can assure residents here that they have systems in place to prevent improper foreclosures.”
The issue here is that in many circumstances, legal documents required by banks as part of foreclosure proceedings have been improperly certified by staff at these lenders. Planet Money has been running some excellent stories on the issues that are surrounding these documents, and they’re worth a read.
DC is a special case because there is a non-judicial foreclosure process, whereby the courts are avoided entirely, and the process is handled through the contract that you sign when you take out the loan on your house. Norton’s call for a moratorium could likely buy families time to avoid these processes, but given the rate at which banks are not modifying loans, I’d say a moratorium isn’t going to save too many homes.