House resolution advocates temporary foreclosure moratorium
Rep. Marcy Kaptur (D-Ohio) introduced a House resolution that would establish a temporary national foreclosure moratorium. Kaptur submitted H.R. 344 to the House Financial Services Committee on July 8, which called on President Obama to declare "a national residential mortgage foreclosure emergency" and encouraged individual states to enact the moratorium. The committee is likely to reject the resolution. In previous committee hearings, members from both side of the aisle voiced concern over delays in the foreclosure process and impatience with problems in mortgage servicing that has slowed a housing recovery. Servicers filed 2.9 million foreclosures in 2010, according to RealtyTrac, which tracks the data on the county level. That would have been 20% higher had these firms not had to put their own freeze on the foreclosure process last fall, RealtyTrac Senior Vice President Rick Sharga said at HousingWire's REO Expo in June. Problems arose when servicers were found to be signing foreclosure affidavits en masse without a proper review of the documents. It took several months for the process to restart, ballooning out the shadow inventory of foreclosures and delaying a housing recovery. That recovery hinges on the speed at which the market moves through the shadow inventory overhang — estimated by some to be as high as 4 million homes. "The government should be trying to speed foreclosures, not stop them,” said Arnold Kling, economist at George Mason University and former economist at Freddie Mac. "Postponing foreclosures may simply be putting off the inevitable market bottom. We need to remove barriers to foreclosures." Write to Jon Prior. Follow him on Twitter @JonAPrior.