What effect did the October moratorium have on housing?
Should the government institute a freeze on foreclosure?
There have been many discussions about such a prospect since October, when some of the largest mortgage servicers placed a brief moratorium on foreclosure filings due to the perceived lack of a paper trails leading to a clear path of ownership.
A host of consumer advocates and concerned homeowners called on the government to freeze all foreclosures until all the paperwork could be accounted for. The banks, meanwhile, said there wasn’t a real problem and that they only froze foreclosures to evaluate their processes.
Many people, including regulators and members of Congress, worried that the freeze would hurt the nation’s housing market.
Here, nearly three months later, we have seen some negative impacts emerge.
Bank owned properties and homes sold at public auctions are now seen as a potential problem by those investors and individuals willing to buy them—meaning that an already injured housing market just took another hit and lost more potential buyers.
These unsold homes will continue to add to the massive amount of inventory and possibly push home values down even more.
It is even more important now that we promote the positive aspects of homeownership—and really educate first time homebuyer to purchase and maintain their homes in a responsible manner. Those first time buyers could be our key to turning the tide on our housing woes. – Shannon Peer