By J. Taylor Rushing - 10/16/10 04:52 PM EDT
Foreclosure moratorium takes center stage in battleground states
The national moratorium against home foreclosures has found its way into the spotlight in three of the top five states for national foreclosure rates — just in time for the Nov. 2. election.
Three of the top five states in the U.S. for foreclosures are hosting critical swing Senate elections this fall — Nevada, California and Florida — and the issue has finally seeped onto the campaign trail, especially in Nevada.
The debate face-off Thursday night between Majority Leader Harry Reid (D) and challenger Sharron Angle (R) featured the issue in prime time. Nevada is first in the nation with a foreclosure rate of 70 percent, or one in every 69 households, which is an increase of 22 percent from August, and nearly 13 percent from a year ago. Reid and Angle are in a dead tie in the most recent polls: 45.4 percent each, according to RealClearPolitics.
Thursday’s debate was the only one scheduled between Reid and Angle, and the state’s foreclosure crisis was never far from the discussion. Reid reminded the audience that the current Congress passed laws cracking down on mortgage fraud, and that he had spurred Bank of America into its moratorium announcement.
“I’ve worked hard to do something to help beleaguered Nevada homeowners,” Reid said. “Two hundred million dollars here to work on mortgages that are underwater. Forty-eight thousand people in Nevada now have homes as a result of legislation that I pushed, the first-time homebuyer’s tax credit. We, as a result of my pressure on Bank of America, now have no more foreclosures by them, there’s a moratorium there.”
Angle responded that Reid has presided over a system that allowed the government mortgage-lenders Fannie Mae and Freddie Mac to go unregulated, thus spurring the crisis.
“We need to start looking at these and looking at true solutions. And first we have to investigate what caused the problem in the first place,” Angle said. “Certainly this problem has been going on ever since Senator Reid has been in leadership and that was before the Obama administration, but they’ve failed to deal with it in the Obama administration as well.”
The moratorium announced Friday by Bank of America — the country’s largest mortgage-holder — came after disclosures that foreclosure proceedings had been improperly processed with the use of “robo-signers,” or employees with little legal training who never reviewed the paperwork they signed en masse. BoA has applied the moratorium to all 50 U.S. states; GMAC, JPMorganChase and PNC Bank have also announced similar moratoriums.
On Wednesday, U.S. Attorney General Eric Holder issued an even more expansive announcement, saying the Justice Department was looking into the fraud allegations. Attorneys general and regulators in all 50 states have already reached an agreement to investigate the proceedings.
The Obama administration has already come out opposed to the moratorium — setting itself against Reid, who welcomed it — by noting that it could wreak havoc on the financial markets. Press Secretary Robert Gibbs, specifically, warned on Thursday of “unintended consequences to a broader moratorium.”
The second-highest U.S. state for foreclosures is Florida, with a rate of one foreclosure for every 148 households, according to the RealtyTrac Web site. That’s a smaller increase than Nevada, up 4.6 percent since August and 8 percent since Sept. 2009. Florida is where independent Gov. Charlie Crist is battling GOP candidate Marco Rubio, a former state House speaker, and U.S. Rep. Kendrick Meek (D) in a three-way race.
The non-competitive state of Arizona is third, followed by California in fourth place, where longtime Sen. Barbara Boxer (D) faces GOP candidate Carly Fiorina. California’s foreclosure rate is one in every 178 households — an upward bump of nearly nine percent since August and 13 percent since last September. A press spokesman for Fiorina said the issue hasn’t yet been raised on the campaign trail in the week since the moratorium was announced.
The state of Idaho rounds out the top five U.S. foreclosure states, with a rate of one for every 204 households, according to RealtyTrac.