ForeclosureGate: Reps. Giffords and Grijalva call for action

Posted by AzBlueMeanie:

David Safier previously posted Congresswoman Gabriel Gifford's press release regarding the ForeclosureGate scandal. Giffords calls for home foreclosure moratorium (excerpt):

Giffords wants more. She is calling for "an immediate three-month national moratorium on foreclosures so lenders and loan servicers can address rampant problems that have led to homeowners being wrongly removed from their homes."

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“One family wrongly foreclosed on is a tragedy we simply cannot accept,” Giffords said. ”The widespread disarray among lenders and loan servicers is making a bad situation worse for many homeowners. A moratorium would give lending institutions and servicers time to get their act together and prevent any more mistakes from being made.

The congresswoman wants lenders to voluntarily follow suit and believes that a three-month halt to foreclosures would provide lenders and loan servicers sufficient time to rectify many of the problems. She also believes that there should also be mandatory mediation by an independent third party.

Congressman Raul Grijalva's press release:

Rep. Raul Grijalva continued his push for strong national mortgage reform today, sending a letter to the special inspector general of the Troubled Assets Relief Program demanding an audit of mortgage lenders GMAC, Fannie Mae and Freddie Mac. The letter — officially sent Oct. 15 and also signed by Reps. John Conyers, Marcy Kaptur and Alan Grayson — cites a Sept. 24 Reuters article about irregular and possibly illegal behavior at GMAC, which controls mortgages around the country:

GMAC earlier this week said it discovered employees submitted affidavits containing information they did not personally verify, casting doubt over how much care was taken in dealing with the highly sensitive U.S. housing issue. The errors also applied to requirements that documents be signed in the presence of a public notary. The company said it has suspended evictions and post-foreclosure closings in 23 states. It has not halted foreclosure proceedings, it said.

The letter is just the latest step Grijalva has taken to protect homeowners' rights nationwide. In April, he introduced the Right-to-Rent Act to allow homeowners facing foreclosure to remain in their homes for up to five years as renters at fair market value set by a judge. The bill would maintain neighborhood property values, prevent vacancies, allow families to avoid foreclosure and encourage banks to renegotiate potentially problematic mortgage terms. Grijalva voted in July to pass the Wall Street Reform and Consumer Protection Act, which includes strong new prohibitions on deceptive and overly aggressive mortgage practices. That law is opposed by his challenger, Ruth McClung, who has said repealing it is among her "top priorities."

"We need serious improvements to how we handle mortgages and housing in this country, because the downturn we're dealing with now comes in large part from the housing collapse," Grijalva said. "I've proposed solutions and taken action. Ruth McClung's only real position so far is opposing the steps Congress has taken to protect homeowners. If she has a plan, let's hear it."

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