Foreclosure Freeze: Good or Bad Idea?

By: Liam Martin Email
By: Liam Martin Email

LANSING -- It's an all too common site.

Foreclosure signs.

More than 100,000 Michiganders battled foreclosure in 2009, and now a movement is afoot to put a plug in the hole -- Lansing Mayor and Democratic gubernatorial candidate Virg Bernero, along with Gov. Granholm, are calling for an all-out moratorium on foreclosures.

Bank of America's decision to do just that has some wondering -- should the rest of our lenders do the same?

"It's an absolutely idiotic idea," says Patrick Anderson, founder of the Anderson Economic Group.

He says a freeze could buckle an already fragile economy.

"It wouldn't just tighten credit, it would eliminate credit," Anderson says. "When you say, 'You don't have to pay your bills,' the first thing that happens is, whoever's selling the product stops selling it."

Even worse, opponents say, freezing foreclosures could further hamstring homeowners who simply can't make their payments.

But proponents of the freeze say it's not about bullying the banks or keeping delinquent homeowners in their houses. A moratorium would be intended to ensure the banks have a proper and fair process before foreclosing on a homeowner.

"Servicers make up their own guidelines," says Tami Farnum, a foreclosure mediate with Franklin Street Housing in Lansing.

She says lenders like Bank of America often foreclose on folks who qualify for loan modification simply because they didn't properly review their paperwork.

"I have had a couple in the past month that went to sheriffs sale -- and they were Bank of America -- that shouldn't have had they had a good negotiator looking at the file," she says.

A little time to vet that process, Farnum argues, is all the struggling homeowners are asking for.

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  • by Anonymous on Oct 15, 2010 at 04:14 PM
    For you people who think that foreclosure is happening because people just stop paying on their house because they want to. Think again! Go find out why foreclosure is happing. I bet you find those folks are out of work, make much less than they did. We are no where close to a recovery.
  • by non anonymous on Oct 15, 2010 at 12:45 PM
    The govt/media told you the recession ended like over a year ago... you smiled and said good that's what we wanted to hear. If they said the moon was made of cheese would you believe that too? Some of you must be Waaay to busy to have any idea whats going on.
  • by Kelly Location: Lansing on Oct 15, 2010 at 10:01 AM
    What has happened to our country? What has happened to Personal Responsibility? We have way too many Americans standing around with their hands out waiting to be taken care of. Where would the handouts come from if all of us stopped working, stopped producing, stopped making house payments, closed our doors and stopped paying employees, etc. You only have to look as far as Europe to see the results. The perpetual victims in America better wake up and step up because the rest of us are getting pretty tired of carrying the burden.
  • by Anonymous on Oct 15, 2010 at 06:55 AM
    The GOP and DEM is telling us that we are in recovery. I say Bull Cra*!!!!! We are no were near a recovery!
  • by joe Location: lansing on Oct 15, 2010 at 04:42 AM
    I have friends that have a mortgage thru Bank of America, they havent made a payment in two years,and the bank has never contacted them.I think the bank lost them in the mess.I didnt make a payment for two months,I was foreclosed on in four months.
  • by Darby Location: Shaw on Oct 14, 2010 at 09:44 PM
    Help expose the fraud that is Foreclosure-gate! Support the cause... #!/pages/Mortgage-Payment-Free ze/159046070785400
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