Rep. Marcy Kaptur has submitted a resolution to the House Financial Services Committee asking President Barack Obama to declare a national state of emergency for the foreclosure crisis.
The resolution sites a variety of issues troubling the housing market stating, "Whereas the United States finds its housing market in a precarious and unstable state, where homeowners' mortgage balances are routinely larger than the current value of their homes and where people are losing their homes at an alarming rate.
"The President of the United States should declare a national residential mortgage foreclosure emergency and, through such declaration, encourage the States, by use of their police power, to enact a moratorium on residential mortgage foreclosures similar to the moratorium enacted by the State of Minnesota in 1933 and upheld by the Supreme Court." - Rep. Marcy Kaptur
A state of emergency would give the government the power to prevent mortgage companies from evicting homeowners who do not pay their mortgage. A national foreclosure moratorium could work wonders for those homeowners who don't have other debt troubles; but for those who are sinking financially in other areas, it may only delay the inevitable. Also, we need to ask ourselves, how would these homeowners eventually catch up on delinquent payments once the foreclosure moratorium ended? At least in bankruptcy, the debtor immediately resolves their financial troubles.
But a moratorium would only delay a foreclosure without guaranteeing a resolution to the underlying issues. Any national moratorium on foreclosures must be well thought out and should be part of a comprehensive plan to address the overall debt troubles that homeowners are facing.
(source: HousingPredictor.com )