The White House, yielding to common sense, opposes a national moratorium on foreclosure sales on the grounds that it would harm the housing market.
David Axelrod, a White House senior adviser, said on CBS's "Face the Nation" on Suday: "I'm not sure about a national moratorium because there are, in fact, valid foreclosures that probably should go forward."
That brings up the question of what a valid foreclosure is. My definition: When a homeowner hasn't made mortgage payments in at least three months, and the servicer has notified all necessary parties that it intends to take back the property, and the borrower doesn't reach some sort of accommodation with the servicer, then a foreclosure is valid.
Some readers commented last week that mortgage servicers forged documents. The robo-signing issue has nothing to do with forgery. The robo-signers aren't accused of faking documents. They're accused of not closely reading the documents, which mostly are legal boilerplate.
Other readers say the foreclosing servicer should be required to prove ownership of the loan. I'm not sure what the argument is here. The borrower doesn't send checks to the servicer. After a few months, that same servicer starts the foreclosure process. Obviously, the servicer works on behalf of the owner (or owners) of the loan.
When two servicers foreclose, I can see where ownership of the loan becomes a valid question. But I don't think there are a lot of cases of multiple servicers foreclosing on the same loan.