Law Suits & Courts

White House Says No Need for Foreclosure Moritorium

Posted on Monday, October 11, 2010

White House Aide Doubts Need to Halt Foreclosures
By THE ASSOCIATED PRESS


WASHINGTON (AP) — A top White House adviser questioned the need on Sunday for a blanket halt to home foreclosures, even as pressure grows on the Obama administration to do something about growing evidence that banks have used inaccurate documents to evict homeowners.

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“It is a serious problem,” said David Axelrod, who said that the flawed paperwork was hurting the nation’s housing market as well as lending institutions. But he added, “I’m not sure about a national moratorium because there are in fact valid foreclosures that probably should go forward” because their documents are accurate.

Mr. Axelrod said the administration was pressing lenders to accelerate their reviews of foreclosures to determine which ones had flawed documentation.

“Our hope is this moves rapidly and that this gets unwound very, very quickly,” he said.

With the reeling economy already the top issue on voters’ minds, the doubts raised over foreclosures and evictions are becoming a political issue with the approach of the Nov. 2 elections.

Underscoring those pressures, two leading lawmakers took opposing stances on the wisdom of a moratorium.

Representative Debbie Wasserman Schultz, a Democrat from Florida, said she backed a foreclosure moratorium and government discussions with the banking industry to devise ways to let lenders reshape troubled mortgages. She said the foreclosure problem had been “extremely vexing” in her state.

The No. 2 Republican in the House, Eric Cantor of Virginia, said a national moratorium would remove the protections that lenders needed.

“You’re going to shut down the housing industry” with a national stoppage, Mr. Cantor said. “People have to take responsibility for themselves.”

On Friday, Bank of America became the first bank to halt foreclosures in all 50 states. Three other institutions, JPMorgan Chase, the GMAC Mortgage unit of Ally Bank and PNC Financial Services, have stopped foreclosures in the 23 states where foreclosures must be approved by a judge.

Mr. Axelrod spoke on “Face the Nation” on CBS, and Ms. Wasserman Schultz and Mr. Cantor were on “Fox News Sunday.”


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