New York Foreclosures: One Year Moratorium For Foreclosures Sought

One Year Moratorium For Foreclosures Sought

March 3rd, 2008

While the country continues to reel under foreclosures the government is trying to find solutions to the problem. The Bush team gave the green signal to keep on hold foreclosures for 30 days. Senator Hillary Clinton suggested 90 days moratorium but in New York state two legislators are pushing through a reprieve for a whole year. James F. Brennan a Democrat from Brooklyn and Frank Padavan a Republican from Queens have taken the initiative by introducing it in December 2007. If pushed through the residents will be able to stay in the houses that are their homes for a whole year utilizing this time to work out viable alternatives with the lenders. No such extreme measure has been taken since the 1930’s during the time of the Great Depression. In 1933 Governor Herbert H Lehman imposed a hold for about a year on foreclosures that were current as regards taxes and interest. The ban was renewed annually till 1949. The Bill has been generating positive reactions. 60 Assembly members have already given their signatures said representatives of ACORN. The latter community organization boasts of more than 60,000 members across the country.

Bertha Lewis of New York ACORN strongly opines that it must be admitted that there is a crisis and that something should be done to alleviate it. Brannan contented that there is nothing wrong in giving time to people in foreclosure trouble so as to work out a workable solution mutually satisfactory to borrower and lender.

Neiman, the superintendent of banks in New York said that they would review the proposal. The Mortgage Bankers Association commented that suspension of payments for some time can be a tool but not a permanent solution. Each loan needs to be addressed individually, said Robbins the chairman of the association after civil rights groups last year pressed for a six month hold on foreclosures.

The apprehension is that a long moratorium will discourage bankers in New York from extending loan facilities to those who stumble in their repayments. However the Bill has received support from both Democrats and Republicans. Padavan says this ‘common-sense solution’ is the call of the hour.

In New York City foreclosure filings have doubled in the last few years – going up from 3,461 in 2004 to 8,263 in 2007 according to reliable analysis from New York University. The situation is particularly bad in Jamaica and Hollis parts of Queens where foreclosures have trebled.