Norton Calls for Moratorium on Foreclosures in D.C. (10/06/2010)
Norton Calls for Moratorium on Foreclosures in D.C.
October 6, 2010
WASHINGTON, DC -- Following disclosures that lenders may have filed false or fraudulent foreclosure documents in tens of thousands of cases, Congresswoman Eleanor Holmes Norton (D-DC) today called on lenders and loan servicers to halt all residential foreclosures in the District of Columbia "until they can assure residents here that they have systems in place to prevent improper foreclosures," said Norton. In recent weeks, three major residential lenders -- J.P. Morgan Chase, Bank of America, and Ally Financial -- have voluntarily stopped foreclosures in the 23 states that require a court order to foreclose on a borrower. Norton fears that D.C. residents may be at greater risk than in states that require a court order for foreclosures because D.C. law does not require a court order for a lender to foreclose. "My office has been flooded with calls from constituents about banks refusing to modify mortgages. Now we learn that not only are banks refusing to modify mortgages, some are foreclosing on borrowers without proper documentation. We seem to have forgotten that the Troubled Asset Relief Program, or TARP, was designed not only to stabilize the banking sector, but also to help homeowners at risk of foreclosure."
The Congresswoman is further concerned because homeowners have not received assistance despite a "Saving Homes, Foreclosure Prevention Day" event, where Norton worked with the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Treasury, HUD-approved counselors, 13 mortgage lenders, and Fannie Mae and Freddie Mac to provide one-on-one services to 765 homeowners. Norton wrote a letter last month to Treasury Secretary Timothy Geithner expressing concern about allegations from her constituents who attended the foreclosure prevention day of "stonewalling" and bureaucratic red tape by lenders. None of these constituents have as yet qualified for the Save Our Homes program or the Home Affordable Modification Program (HAMP) despite the modifications promised at the event.