How Are Foreclosure Moratoriums Effecting The Foreclosure Rates

Now that we're several years into this foreclosure crisis, we've seen governments (local, state, and federal) try just about everything possible to stop foreclosure. The first government bailout plan was a complete failure and the second doesn't seem to be much better than the first. Local governments are also getting involved by imposing foreclosure moratoriums, where the state legislatures impose unconstitutional laws that interfere with legal contracts and our court system.

Even though something must be done to stop foreclosure, interfering with our country's justice system, or taking away constitutional rights is definitely not the way to do it! Many 90 day foreclosure moratoriums that were imposed in the past have been ineffective at stopping foreclosure, so some were extended past 90 days and other stats/counties just abandoned the whole idea, because it wasn't working. After the moratoriums have run their 90 day course, it's business as usual and the courts are, once again, overrun with foreclosure proceedings. It's important to understand that a moratorium is completely worthless if the homeowners don't use this time to fix the problem!

The officials imposing these moratoriums need to realize that homeowners are failing to take action during this time. The purpose of a moratorium is to allow homeowners additional time to find a solution to stop foreclosure. The problem with this concept is that homeowners all think the government is going to bail them out, so they are sitting back and doing nothing. Once the moratorium ends, nothing has changed. Everyone is still in foreclosure and they are no closer to a solution.

In Ohio, the house approved a 6 month foreclosure moratorium and a $750 fine for banks to file a foreclosure with the court. However, the bill is unlikely to pass at the senate level, because many view it as unconstitutional. These state wide moratoriums present several huge issues, because many of the foreclosures across the nation are legitimate. No laws have been broken and the lender deserves to recover their property to satisfy the loan. Simply not allowing lenders to recover their assets in a case like this is completely ridiculous. These laws are causing lenders to go out of business and it wont surprise me if the lenders decide to put another "moratorium" on lending pretty soon.

It doesn't make any sense to lend money while the government wont let you collect on the loan if it's not paid! The bottom line is, unless there is a legal cause the fight a foreclosure, such as predatory lending practices (and many others), then there is absolutely no reason the government should be involved in this type of legal contract. There are many ways for homeowners to keep their home, without the government getting involved and imposing unreasonable laws and wasting billions of dollars in taxes.

The lesson to be learned here is to take advantage of any time you are given to stop foreclosure. Don't just sit back and wait for someone to come bail you out. If you are one of the few homeowners lucky enough to be in a county where there is a foreclosure moratorium, then make sure you find help! You need to understand that a moratorium DOES NOT STOP FORECLOSURE, it only postpones it until a later date. You need to use this time to either sell your home, or to get a loan modification on your existing loan.
Nick writes for the ForeclosureFish website, which gives homeowners the advice and resources they need to avoid foreclosure on their own and defend themselves against the bank's lawsuit. The site describes various methods to save a home, including foreclosure refinancing, deed in lieu, loan modification, stopping a foreclosure sale, bankruptcy, and more. Visit the site on the web to read more about how you can avoid foreclosure and eviction, repair your credit, and establish a long term financial plan once a crisis is over: http://www.foreclosurefish.net/