By Peter Marcus, DENVER DAILY NEWS
Local community groups are calling for a nationwide foreclosure freeze as the White House yesterday rejected calls for a nationwide moratorium on housing foreclosures.
Denver faith and community groups have joined a growing call for a nationwide moratorium on foreclosures, arguing that state and federal officials need to conduct an investigation into banks’ foreclosure processes.
Disclosures that some big U.S. mortgage processors filed false affidavits in thousands of foreclosure cases is drawing fresh scrutiny to the industry.
The U.S. Senate Banking Committee is planning on holding a Nov. 16 hearing into allegations of improper and fraudulent mortgage servicing and foreclosure processing.
Mortgage industry critics contend banks used “robo-signers,” or people who signed hundreds of foreclosure documents daily without reviewing them, and are unfairly pushing residents out of their homes.
Metro Organizations for People in Denver yesterday called for a foreclosure freeze in Colorado while state investigators can review banks’ document processing and foreclosure procedures.
“There is nothing positive about foreclosures,” said Toby Serrano, a MOP board member. “The banks need to stop their shenanigans and engage in serious foreclosure prevention that includes resetting principal so we can stabilize the housing market and get America back to work.”
White House spokesman Robert Gibbs signaled on Tuesday the administration’s wariness of backing populist calls to halt evictions, pointing out that a nationwide freeze could cripple an already slow recovery of the U.S. housing market.
Industry experts warn a moratorium would create a backlog of homes that would later come to the market, depressing prices and further hobbling the economy.
Bank of America Corp, the largest U.S. mortgage servicer, has temporarily halted evictions nationwide. Other lenders have announced more limited suspensions or left their existing foreclosure policies in place.
Banks are expected to take over a record 1.2 million homes this year, up from about 1 million last year, according to real estate data company RealtyTrac Inc. There were 20,347 home foreclosures completed in Colorado last year, according to the Division of Housing. New foreclosure filings in Colorado rose last year to 46,394, according to the division.
“Banks aren’t just making mistakes,” said Tomy Roman, MOP board member. “They’re fabricating documents, forging signatures and illegally throwing people out of their homes. What we’ve seen so far is just the tip of the iceberg.”