suspension of forclosures will only dry up credit forclosure is the stop loss for the lender would you take a trade, if stops could be suspended once you took a position? housing is NOT a guaranteed 'right' people who win have always praised themselves for their 'savy' if you cant forsee the possibility of loss in a bubble, that's too bad bubbles always return to their base
That idea is like passing a law to stop drunk driving tickets & jail time for a period of time. What reason would people have to pay their mortgage if there were no repercussions if they didn't??? I can think of better things to do with 7 months of mortgage payments (7 months is the foreclosure process duration where I live) than to send it to the bank if they have no recourse.
What if someone said that the person who owes you money doesn't have to pay you and gets to keep whatever you sold him. Say, it was a used car that you sold to someone. Congress can pass anything but outlawing foreclosures which is amended existing legal contracts is unconstitional.
Great idea. Let's allow all the people who bought homes they knew they couldn't afford to live there for free while making all those suckers who lived within their means keep making mortgage payments. Maybe next we could impose a 10% tax on all personal savings accounts and use that money to pay off deliquent credit cards for all the people who maxed out their cards and are facing bankruptcy. After that we could give "tax rebates" to people who don't even pay taxes.....oh wait, the newly elected president is already going to do that. Anyone else have any fantastic ideas to really stick it to responsible citizens and bail out the greedy and the stupid?
During the Great Depression Minnesota did just that. Everybody stopped paying their mortgage since they could not be foreclosed on. Obviously mortgage lenders went out of business and mortgages were nearly impossible to obtain for decades after this little fiasco. For housing prices to ever stop falling, there has to be a bid. If mortgage lenders stop lending because they can no longer foreclose (or the risk of government disallowing foreclosure rises), they will not lend or they will require massive downpayments and very high interest rates to compensate them for their risk. This means that housing prices will have to fall further for the market to clear and the whole "mess" is exacerbated.
Delaying foreclosures will do nothing to help people. The costs of owning a home are too much for many people.