Government Considers Foreclosure Freeze
Fox Business (Link) - Ken Sweet & Peter Barnes (February 19, 2010)
The White House is considering changes to its mortgage modification plan that could include a freeze on home foreclosures, sources tell FOX Business.
According to industry officials who have been briefed on the plan, the administration is considering changes that would require home-loan servicing companies to push delinquent borrowers into the Home Affordable Modification Program before they consider foreclosure.
Lenders, investors and mortgage-service companies would be prevented from foreclosing on a homeowner while a home buyer is solicited, responds and eventually goes through a trial period under HEMP.
Analysts tell FOX Business that the possible changes, if adopted, effectively prevent virtually all foreclosure action in the country for an extended period.
While home prices have recovered and sales activity has picked up, the latest statistics show that the number of foreclosures nationwide continues to rise. Loans that have headed into the foreclosure process rose to 4.58% of all mortgages in the fourth quarter, the Mortgage Bankers Association said Friday. New delinquencies, however, declined.
The freeze on home foreclosures would be a new step for the Obama Administration, which has pushed banks towards mortgage modifications as part of a solution to solve the ongoing problems in the housing market.