Battle Against Philadelphia Foreclosures

Tags: foreclosed, Foreclosures, Pennsylvania, philadelphia
Posted in Foreclosure, May 19th, 2008 |

By getting temporary freeze, Philadelphia has bared its fangs and is one up in the battle against foreclosures. The City Council allowed for enforcement of moratorium on house mortgages. The sales scheduled for April auctions were put off, said Curtis Jones, a city council person. He was one of the sponsors for the resolution and says that now his aim is to suspend the court auctions indefinitely. Economic justice is imperative so that people do not get thrown out of houses that are their homes.

The council legislation however is non-binding. It aims to give the residents time to work out alternatives with lenders. The Sheriff John Green as well as the Common Pleas Court President, Judge Darnell Jones gave their support for it to be implemented.

The legislation is not without precedent. In 2004 the City Council had called for the Sheriff’s intervention when 1,120 units were up for foreclosure sale. A stay was granted on the sales in Philadelphia. At the same time the Pennsylvania Department of Banking conducted a survey across the state. It was this study that has led to the passing of the legislation putting a hold on foreclosures.

In 1983 in another instance, the then Sheriff – Joseph Sullivan had successfully got a one year stay on approximately 300 units that were ready to be auctioned in the court.

A report released by ACORN says that 3,206 risky loans contracted in 2006 are likely to face foreclosure. Ian Phillips of ACORN commented that there is a difference between the suggested moratoriums this time and the previous ones. The former is the result of predatory lending and not a product of recession-like conditions. Considering the nature of the crisis strong intervention is necessary.

However Robert Levy of Mortgage Bankers Association of Pennsylvania holds a different view. He contended that it would drive the city lenders out and hike interest rates because of the risk involved regarding intervention from the authorities. In the long run this ‘onerous methodology’ will cause serious harm to the system. It is inevitable that this will take place when lenders are prevented from realizing their dues. Levy hastened to add that the association is keen to be involved in community programmes for financial education and counseling. He would also try to prevent the banks from leaving the Commonwealth of Pennsylvania as a reaction to these consumer protection efforts.