Is it Time to Enact a Foreclosure Freeze?

Representative Marcy Kaptur (D-OH) has proposed a resolution that would put a temporary freeze on all residential foreclosures across the United States comparable to what was seen during the Great Depression.

Kaptur gave her resolution before the House Financial Services Committee, and urged President Barack Obama to declare a “national residential mortgage foreclosure emergency.” She also asked that state law makers use their “police powers” to perform this freeze on foreclosures:

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.

Ohio, the state Kaptur represents, has been hit particularly harder than most states, and due to rising unemployment more and more foreclosures are being seen all over the state. Default rates among homeowners have fallen in New York, Miami and Chicago, but an increase in the number of vacant homes which are yet to be counted in the foreclosure inventory are affecting the housing market.

If the housing market doesn’t start to take steps in the right direction, a foreclosure freeze should allow for some time for lenders and homeowners to come to a solution on the large number of home mortgages that are forecasted to be foreclosed within the next couple of years.

So, do you think that Kaptur’s resolution for a temporary foreclosure freeze is a good or bad idea? Let us know what you think.