Short sale negotiations and transactions lurched to a screeching halt last week as one major lender after another announced temporary, indefinite moratoria on foreclosures while they investigate the foreclosure processes and the extent of the damage that “robo-signers” have caused. In fact, unless you are doing short sales with Wells Fargo, which announced, point-blank, that it had “no plans” to initiate a moratorium on its foreclosure processes, you probably have been cooling your heels when it comes to short sales or maybe even looking into other options.
Oddly enough, while you might expect the administration to jump right on board with a nationwide foreclosure freeze – after all, many congressmen and women already have – President Obama is uncharacteristically reticent on this issue, stating that he “is against a nationwide foreclosure moratorium” even though it is demanded by his own far left base. The president’s own policies are largely based around the successful completion of short sales, which have become a necessity in the housing market and, in some areas, make up as much as a third of all home sales. Experts everywhere believe that an extended foreclosure moratorium in all states could lead to a double dip in the nascent housing market, which is still trying to escape the stagnancy caused by extremely strict lending and a foreclosure glut.
Unfortunately, according to the administration, “a nationwide moratorium on foreclosure sales may be inevitable,” according to a very excited PSLweb.org (Party for Socialism and Liberation). A source “high in the Obama administration claims that the nationwide moratorium could be the next step, “despite grave reservations about the impact a broad freeze would have on the nation’s housing market and economic recovery”
Discussion Point: Do you think that the president is just posturing before moving right along to a national foreclosure freeze?