For the next four years, Schwarzenegger's initiative
would require lenders to wait an additional 90 days before selling a defaulting borrower's home. The moratorium would give lenders and borrowers more time to avert foreclosures by negotiating more-affordable mortgages. To eliminate the 90-day delay -- which would be particularly costly to mortgage servicing companies --lenders and servicers would have to adopt temporary interest-rate cuts or other techniques that reduce monthly payments to a standard level of affordability.
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From Housing Wire:
Industry insiders clearly think that an industry-wide and legislator-led push to halt foreclosures is likely to do much more harm than good, according to the results of a recent poll of residential construction, mortgage origination, servicing, real estate sales, REO management, capital markets and investor/hedge fund managers. The informal survey, conducted by New York and Dallas-based National Asset Direct Inc., a principal buyer of performing, sub-performing and non-performing residential assets, asks key market participants for thoughts on hot-burner issues each month.
A whopping 65 percent of those surveyed in November said that a national moratorium on foreclosures would have a negative or a minimal effect on the nation’s housing crisis, with only 14.5 percent suggesting such a nationwide halt to foreclosure activity would be a “significant” positive. A sampling of responses from participants, whose identities are kept anonymous, is telling.
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