By Sam Youngman - 10/12/10 03:40 PM EDT
White House press secretary Robert Gibbs said Tuesday that President Obama is opposed to an across-the-board moratorium on home foreclosures because doing so could produce "unintended consequences" that hurt the economy.
Gibbs said the president does support the action being taken by a majority of states' attorneys general "to get to the bottom of and to fix the process in the mortgage industry."
But Gibbs said there are "downsides to a larger moratorium" that could further damage the already struggling housing market because a moratorium freezes all the processes involving housing, including sales.
"If there's an empty house in the neighborhood that somebody has a contract on and they're closing date is next week and there is a moratorium, that closing doesn't happen, right?" Gibbs said. "That sale doesn't happen. That recovery doesn't take place."
Gibbs said the president is "supportive of getting to the bottom of the process and ensuring that these banks are following the legal process for making these decisions."
But, Gibbs said, "there are a series of unintended consequences to a broader moratorium."
White House senior adviser David Axelrod previously had signaled opposition to a moratorium during an appearance Sunday on CBS's "Face the Nation."