Posted on 03/31/2008 6:50:08 AM PDT by 2banana
PHILADELPHIA (Reuters) - Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments -- potential relief for tens of thousands of struggling debtors.
Sheriff John Green said on Friday he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period.
His action follows a nonbinding resolution passed unanimously by the Philadelphia City Council on Thursday calling on Green to stop the sales to give borrowers more time to seek a settlement that would prevent them from losing their homes.
Philadelphia becomes the first U.S. city to halt foreclosure sales in the current crisis, although Cleveland and Baltimore are considering similar measures, said ACORN, an advocacy group for low-income families.
The group said 45,470 subprime foreclosures are expected in Pennsylvania between the third quarter of 2007 and the end of 2009.
Green, the sheriff of Philadelphia city and county, is trying to identify and track homeowners with weak credit histories who took out the loans with initially low repayments but who are no longer able to afford them because their rates have adjusted sharply higher.
Such loans are expected to lead to a flood of foreclosures throughout the United States this year, and have led to severe losses among financial firms trading in securities backed by the mortgages. ACORN estimates 2.2 million mortgage loans will go into foreclosure in 2008 due to the subprime crisis.
"Given the severity and complexity of mortgage foreclosures, a moratorium will allow for more time to identify and help distressed home owners," Green said in a statement.
more...
The credibility of the United States of America is now at risk. NOBODY in the world is going to have confidence buying US debt anymore. The monkeys running our government are now telling investors that loans no longer have to be paid in the good ol' USA. Crime pays. Mortgage fraud will not be prosecuted. Loans do not have to be paid back. And money will fall from the sky.
ALL banks in the Delaware Valley and the WORLD should put a big red line around Philadelphia - no more mortgages there – ever again. Lenders can play this game too...
—NOBODY in the world is going to have confidence buying US debt anymore—
A blessing in disguise. If nobody buys our debt, that will force the USA to finally tighten its belt.
Why does this have the smell of a test drive for more widespread nonsense.
Can’t let a little thing like the contracts clause of the Constitution get in the way of political grandstanding, can they?
I’m not a doom and gloomer, but to see a city announce that banks cannot sell foreclosed properties does remind me of “Atlas Shrugged”. Who wants to participate in that sort of economic arena?
Great post. Will Hillary and Barack be questioned about this in the upcoming Pennsylvania primary?
Maybe I missed it, but I didn’t see any mention of a corresponding moratorium on tax foreclosures....
Oh, yeah — this gummint... Do as I say, not as I do...
Now, when you consider the powers that the city DOES HAVE, the city didn't give them a 100% abatement on property taxes, did they? The ability to apply the entire tax escrow balance to the loan might be enough to bring the loan out of foreclosure, no? And suspending the escrow contribution might be just the temporary adjustment these homeowners need to buy the time necessary to refinance.
And let's talk about tax liens - I wonder what the city is doing there.
Nope, politicians playing with OPM again.
Well, well, well. I live in a surrounding suburb of Phily and we’ve been trying to buy a house that went onto the foreclosure list a month after we submitted our bid (short sells are notoriously slow). Everything was going relatively well, then Citigroup sold its loans. The new lender would have gotten at least 90% of their current loan with our bid. About a week ago, within days of their acquisition of this loan, they immediately refused our offer and said we’re gonna wait until we get the full amount, plus bankruptcy expenses from the new buyer. This house has sat on the market for a year and we are the first qualified buyer who offered a reasonable bid. I’ve thought all along that government rumors of playing Santa Claus ruined this sell for us.
They are trying it again with the gun laws.
.
I watched a friend of mine "go broke". Then I watched the patio being built, the new pool, a "rental car" which was an arm and a leg in the end...
How did they pay for this "stuff"....Easy..they did a refi.
When they sold their home, there wasn't any equity....They had already spent it!!
My thought exactly.
Government is like the Mafia as described by Ray Liotta in Goodfellas:
But now the guy's gotta come up with Paulie's money every week no matter what. Business bad? **** you, pay me. Oh, you had a fire? **** you, pay me. Place got hit by lightning huh? **** you, pay me."
yeah - but theyll probably get whacked with abitrary and capricious practices or some other nonsense
does this mean I can stop paying today ?
I wonder if the same ruse will work on the IRS
I hope Philadelphia gets the butts sued off.
NO WAY.
That is exactly what a tightening leading market will bring. Which I am glad Bernanke is in control and not the people who want to let our financial institutions and housing markets crash.
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