Upcoming Foreclosures

The county I live in is passing a law to stop foreclosures. What do you think?

I work for the county in the offices so I am not allowed to disclose what state or what county. Basically the heads of the county government and the sheriff got together and are temporarily asking the sheriff's department to stop foreclosures pending the new law. The law was created to because it was displacing familys who had no where to go and also leaving abandoned property in the town where it has increased crime. Under the new law, a bank or mortgage company cannot foreclose upon a property unless 1) Can prove they will have someone occupy that property within 30 days or 2) The taxes have not been paid on the property In addition, the law states that it will not allow foreclosure if there are children living in the house until it is stipulated in the foreclosure that they will have adequate housing. Meaning, they can't throw a parents with children on the street unless the parents, state, or bank find them adequate housing. 2) There is also another law they are passing that if a foreclosed property is abandoned for more then 90 days, the county will fine the property owner $20/day until proof can be satisfied that either the property has been sold for occupancy or the bank has found someone to occupy the property. These new laws exclude private party liens on property. Such as owner-financing. I think it is great that they are doing this. I mean sure, people should pay their bills. No question about it. But sometimes, people lose their jobs or mortgage companies screw over people by changing their interest rates and people can't afford to pay their mortgage. This law is to protect people from being out on the street and to control crime from abandoned property. Unfortunately, when a bank gets wind of this, I am sure they will start sueing in state court when the sheriff's office refuses to do a foreclosure. Then ofcourse, no one will right mortgages in the county probably. But I am ok with that. What do you think about this? FYI - Let me clarify the law. If the bank wants to foreclose but the occupants are paying the taxes, the bank can still foreclose as long as they can have proof there will be occupancy after they leave. Ofcourse, in regards to children, that other thing in regards to making sure there is adequate housing would have to be met too in order to go forward with the forclosure. kkoh: So you would rather see all these families get displaced so that the banks make their money? Wow. Got it.

Public Comments

1. First of all, no couintry would create such law, and secondly, with bank financing, few of the global population could accumulate enough money to purchase a home. Get real.
2. Excellent idea. I agree with your opinion completely. Yes, people should pay their loans and their bills. But the banks who do the foreclosures are taking their money and they are leaving society to clean up the mess; like homeless families and more crime. Excellent idea. Let the banks take some responsibility too! They gave out these loans without checking.
3. Great Idea! Unfortunately, this is going to raise a very large ruckuss. I mean, they will bring it to state level for sure. I can see it now. Countrywide files a lawsuit because your county will not go forward with 50 foreclosures. It gets to state level and then a senator jumps in makes it a state law. Ofcourse my only concern is timing of the law. I mean, mortgage contracts dated before the law should technically not be part of the law. But then again, it shouldn't matter when the mortage contract was signed. This is a foreclosure law. This does not affect mortgage contracts, just foreclosure filings and proceedings. If that is the case, then the banks will be SOL. Another point though. What happens if people with kids get a mortgage then because of the new law, they decide not to pay anymore? I mean, yes, the bank can work with state agencies and/or have some slum property to put them in under a lease for renting. That would be a way for them to get around it. But what if the family can't pay the lease? Lots of what ifs.
4. I think the real estate market in your country is about to tank, big time. If the government wants to protect people from mortgage foreclosures, they need to get their economic management together, provide decent public housing and create incentives for landlords and mortgage holders to avoid the need for foreclosure. Penalising people when others do the wrong thing is bad policy and makes for bad law. But it's a brave experiment, lol. Cheers :-)
5. I don't think that this will be the most prudent decision. Effectively, this means that some people will be able to live in their houses without paying. Try to think about it from the bank's point of view. If say a lot of families get wind of this, and decide to stop paying the banks, I'm fairly sure that the state, banks or social services will take a while to find new accommodation for the said families. As a result, banks cannot recoup their loses, and some people might take advantage of the situation by just refusing to pay altogether. Banks will not have sufficient incoming cash flow, which might result in a run on the banks, especially if the mortgage banks are based locally. As had been seen with Bear Stearns and Northern Rock, the Feds and BoE are very keen to ensure that there will not be an instability within the financial system and will rescue the banks if necessary. However, I doubt that the law in question will even be passed and I am fairly sure that the banks will take this into courts. You have to look at this from the bigger picture, passing this law will have ripple effects across the global economy. Just because some families are displaced does not mean that you have to enact this law. If the financial system was to crumble, even more families will be in despair. Think back to the South East Asian financial crisis, when the stock market collapse in the said countries. Many breadwinners, having lost their life savings, plunged to their deaths. Inflation in Indonesia was double digits. SEA currencies were almost invaluable. I'm not saying this law will cause such a large effect, but one can never be too careful. You have to consider the unexpected side effects of the law, and not just the immediate benefit of it.
6. such a law wouldn't be necessary if the original lenders were properly regulated by government. now taxpayers are having to bail out people who were given loans that were given by irresponsible lenders.