Would a moratorium help the foreclosure crisis?

I typically don’t pay attention to bill introductions at the start of a legislative session.

But given all the stuff we’ve been writing lately on foreclosure, I thought I’d highlight the newest effort to stop foreclosures and just ask aloud: What would it mean for the Twin Cities housing market?

The Session Daily has a good synopsis of the bills and where they’re headed next.

Doing this job, I’ve certainly run across lots of people who could use that kind of break, who ended up losing their home, sometimes through no fault of their own.

There’s some evidence we’re in a foreclosure lull right now and that the number of foreclosures could start to pick up again this year.

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But the economist side of my brain knows that incentives rarely work as well, or as surgically, as they are intended. There are always consequences.

There are protections already for homeowners in trouble.

Here’s a quick read from the Minnesota Attorney General’s Office for people facing foreclosure.

And a 2009 law allows homeowners to postpone the sheriff’s sale for five months.

Help us understand why we’d need an extended moratorium. Or talk about what kind of challenges that might create.

Post below or contact me directly and we’ll see if we can get a conversation going.

  • Tim

    There already i$ a moratorium in place for the bank$. They do not pay property taxe$ until the property sells ( but they’ve escrowed them). BOA has a statedgy to allow their properties to be unsecured,grow toxic mold and get turned over for N$P grants in Dakota County .. It’$ a beautiful system, total right-off for the banks,TARP moie$ misdirected to areas needing no help and the homeless shelters swell.in population with county budget’s strapped for lack of property tax collections, that will require an increase in taxes to the average homeowner. Now the bank has no further exposure and poof the problem goes away for them. A moratorium for the homeowner would not fit into the oligarchial system that is currently in place and well protected.. Google Elm Street + Farmington +CDA for a Mpls newspaper.article about a portion of it…