The Politics Of Foreclosure Freeze

February 15th, 2008

Last Tuesday the federal government came forward to help foreclosure victims by announcing a 30 day freeze on the foreclosure process. This operation is named Project Lifeline. But already questions are being asked as to whether it will be of tangible help to the sufferers.

Charlotte and Douglas Birden had bought a house for the first time. On Tuesday they came to know about Project Lifeline. Six mortgage giants have agreed to put a 30 day hold on foreclosure activity. It is hoped that borrowers will be able to utilize this time to work out an amicable mutually helpful plan with the lenders. Only those who are 90 days behind payment and are facing foreclosure will qualify for Project Lifeline.

The Birdens are critical about the limitations of the plan. What will happen after the expiry of the 30 days? It will be back to square one! More or less the same opinion is held by Joyce McDonald of Framework Community Development Corporation. It is a non-profit group that helps first time house owners and those who are struggling with foreclosures. McDonald opines that sub-prime serving companies who hold a considerable amount of mortgage debts should also come forward positively with a helping hand. The freeze should be extended from 30 days to 90 days. The best would be to allow house owners 120 days to come up with alternatives. Unless the government comes up with something more concrete and worthwhile the slide will continue tearing up families and homes. Most of the borrowers are in such a traumatic stage that they can’t think straight and do not know where to turn to. The Bridens are one of the unfortunate victims. They are now trying to see the house before it hits the auction stands

Every Saturday classes are being held by Frameworks CDC for those who want to buy new houses as well as for foreclosure victims.

Foreclosures have overrun the country and its socio-economics. The lenders too are mauled as they are facing a cash crunch. Mortgage payments are not coming in but rather the lenders now have to pay for costly foreclosures. The authorities are finding their tax revenue sources drying up. Conversely the cost of maintaining the health of the neighbourhood is rising. Criminal activity has increased. Unkempt gardens and stagnant pools are causing health problems. Analysts surmise that the worst affected are the minorities and the elderly.