By Joe Lanane
The temporary suspension on home foreclosures by many of the nation’s largest financial institutions last week was met with mixed reactions across the nation. Some Wisconsin homebuilders and developers said they were cautiously optimistic the moratorium will not negatively impact the state’s housing market.
Rather than have a federally mandated foreclosure freeze issued against the industry, Rick Hodges, executive director of the Metropolitan Builders Association, said he was pleased to see the major lenders ultimately make the difficult decision.
“The system has been overwhelmed, and nobody is quite sure what’s going on,” Hodges said. “The market has to sort itself out, and you don’t want anyone else interfering with it too much.”
Jerry Deschane, executive vice president of the Wisconsin Builders Association, said there are two modes of thinking by industry veterans. While some builders stress the importance of hands-free government, others insist intervention is the only solution for recovery.
DeSchane said he sides with the former.
“I tend more toward let the market fix itself, but I certainly can sympathize with anything that helps put people back to work faster,” DeSchane said, citing an 85 percent decrease in building permits since hitting a peak in 2000.
A novel solution: How about a combination of both? There is no telling yet exactly how deep the potential foreclosure quagmire might go. If all the faulty paperwork can be sorted out, the local and federal governments should work with the banks to push through foreclosures that legitimately should be processed.
Either that, or risk an influx of pending foreclosures hitting the market all at once.
Joe Lanane is a staff writer at The Daily Reporter. He admits to “robo-signing” much of his new hire paperwork.