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Senate Amendment to 2009 Stimulus Bill: Moratorium on Foreclosures

This article was written by in Real Estate and Home. 6 comments.

As Barack Obama’s 2009 economic stimulus plan makes its way through Congress, the Senate is taking the opportunity to modify the bill with the intent of providing assistance to the lagging housing market. Rather than allow the market to continue correcting itself, the government would like to encourage consumers to jump into the market, allowing prices to begin climbing again.

Republicans and Democrats in the Senate would like to see 30-year fixed-rate mortgages at 4%, improvements to the first-time home buyer credit, and a 90-day moratorium on foreclosures.

Senate Banking Committee Chairman Christopher Dodd, D-Conn., told reporters last week that he would like a provision in the stimulus package that would impose a 90-day moratorium on foreclosures. Dodd may consider other housing measures as well. (CNN)

People facing foreclosure are unlikely to qualify for a typical mortgage refinance, a tool for those who have been able to pay their monthly bills but who would like to take advantage of lower rates. A 90-day moratorium would give those in danger of losing their homes more time to negotiate with lenders. There are some instances in which this might improve the situation.

I can imagine that someone who has been out of work and unable to pay the mortgage — usually the last payment to be affected when an emergency arises — could be given more time to find a new job. But in this economy, is three months enough time for someone to get back on his or her feet?

The goal of economic stimulus is to prevent another Great Depression or a repeat of Japan’s extended slump during the 1990s. The theory seems to be for the government to throw everything it can at the economic downturn, including the kitchen sink, and see what sticks.

Published or updated February 2, 2009. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about Luke Landes and follow him on Twitter. View all articles by .

{ 6 comments… read them below or add one }

avatar Frugal CPA

Yikes. And I thought my tax liabilities TODAY were significant. They don’t really compare to the $850 billion of future taxes we’ll be paying.

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avatar Chad

I’m torn. One the one hand this bailout business is going to bankrupt the country. On the other hand, this spring I’m going to be in the market for a new home (first time buyer) after having lived overseas for several years. I could really use that 4% interest rate and $7,500 tax credit.

We’ll pay for it in the end, I guess. How are we going to raise $2 trillion for these bailouts? By selling bonds to the Chinese, I guess. Nobody would stand for higher taxes.

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avatar thomas

I’ve already written my Senators and asked them to consider the real impact of this non-stimulus package. Political scare tactics as usual.

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avatar Bul

you know i dont think there is any thing that will fix the economy quickly . the damage is done now we have to rebuild from fresh . we need to stop the jobs here in the united state from going over seas all these tread agrement need to be repealed , nafta and singapoor free trade , central ameican free trad . i have work in the Steel mill most my life and im scared of loosing my job agine i lost one to overseas dumping . now i may loose this one do to goverment miss use of money. sending trillons of money to a country we dont even need to be in know i support our troops but it the Goverment thinking on this that i dont support . the goverment got us in a war we cant get out of thisis sending the United state into the next grear depression wich in my opinion is now when jobs are being lost not by hundredes but 10,000 at a time wake up goveerment make it where the working man can afford to have a new car and home stop big busness from slashing wages because they want a fatter bounus all said her is my opinon

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avatar alias

I personally think that President Obama is doing a great job. I think that the stimulus is perfect. What do we care that we are going to pay it back. You have sat by and let Bush Bush us for 8 years and not a word was said. We are being punished by a Bush administration. So it is what it is. We have always made the rich richer, so now it going over the table to those in need and all of the under the table has gone by by. Ha Ha

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avatar Gwen H

A moratorium on foreclosures couldn’t come too soon! My sister-in-law was robbed of her home when a scam artist (Bagnall) & team including former baseball player Danny Tartabull & fraudulent mortgage broker in Washington State forged (and misspelled) her signature on a quit-sale contract. Although my S.I.L continued to put mortgage payments in a protected account AND spent THREE years & tens of thousands of dollars on lawyers, court bonds AND fighting in court, she was evicted from her house – because everyone kept portraying her as a deadbeat who wasn’t paying her mortgage and was trying to scam her way to stay in the house…as if they were the rightful owners of the house! When the Arizona judge ignored the criminal forgery and told her to leave the house, the scam artist then mailed a letter to her mocking her, saying she was a fool because thieves like him always get away with it! CRAZY. For years she has tried to get the attention of the Police, the Arizona DA, the Washington State DA, Florida & South Carolina DA, California DA, the US District Atty, every Federal agency, several newspapers and local TV news, but everyone is STILL ignoring this outright theft. Another scam this man was involved in: http://www.heraldtribune.com/article/20080304/BUSINESS/803040553

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