ECONOMY - Foreclosures, Loan Modifications the Real Issue

"Would a U.S. Foreclosure Ban Yield 'Catastrophic' Consequences?"
PBS Newshour 10/11/2010

From transcript

SHARI OLEFSON, real estate attorney: Well, it could be very serious, Jeffrey, because, obviously, consumer confidence has been one of the biggest problems in our real estate market. We saw what happened at the beginning of this crisis, with all the interconnectedness of -- in terms of the market and reaching to Wall Street and to Main Street.

And we can only guess what some of the impacts of a more permanent foreclosure freeze might be for the country. In terms of the volume here, I mean, it's a huge bucket. We're also including, though, a lot of foreclosures that are being properly done. And we're just sort of double-checking to see that the procedure has been done right.

My question to Shari would be, if we don't have a PAUSE in foreclosures how can anyone KNOW if they were, in fact, properly done?

Note I do think a "moratorium" is too strong a word. A nationwide pause for review is more in line with this problem.

Also, at the very beginning of this video the statement "nationwide moratorium on selling foreclosed homes" is wrong, is should have been "nationwide moratorium on PROCESSING foreclosed homes." The processing of loan documentation BEFORE sale and before the homeowner vacates.

As noted in my previous post, is the issue of loan modifications. If the people who review loans are also responsible for reviewing loan modification requests AND they do NOT read the loan documentation, then there MAY be may homeowners out there who SHOULD have had their loans modified and not foreclosed.