Obama Says No To National Foreclosure Freeze

Despite the growing chorus of Democratic lawmakers calling for a nationwide moratorium on foreclosures, the Obama administration is opposed to a freeze.

US President Barack Obama
Saul Loeb | AFP | Getty Images
US President Barack Obama

David Axelrod, Obama's top adviser, went on CBS’s “Face the Nation” program on Sunday and announced the administration's positions. Basically following the same line as the Wall Street Journal editorial page — that the foreclosure crisis is just some meaningless paperwork screw-up — Axelrod emphasized the need to provide certainty to the housing market and to get the foreclosure mills up and running again "very, very quickly."

Yves Smith at Naked Capitalism provides the exchange.

Bob Schieffer: I guess the first question I would have is does the administration favor some kind of national moratorium on these foreclosures to get this all sorted out?

David Axelrod: First of all, Bob, it is a serious problem. It’s thrown a lot of uncertainty into the housing market that as you know is already fragile. It’s bad for the housing market and it’s bad for these institutions, which is why they’re scrambling now to go back through their documentation for all of this as they should. The president was concerned enough to veto a bill that came to him last Thursday that would have unintentionally made it perhaps easier to make mistakes. So we are concerned. We’re working with these institutions. I’m not sure about a national moratorium because there are, in fact, valid foreclosures that probably should go forward and where the documentation and paperwork is proper. But we are working closely with these institutions to make sure that they expedite the process of going back and reconstructing these and throwing out those that don’t work.

Bob Schieffer: I mean, I guess people are worried about what do you think the impact this is going to have on an economy that’s pretty shaky right now?

David Axelrod: Look, our hope is is that this moves rapidly and that this gets unwound very, very quickly, and that if they can go back, reconstruct their paperwork, and what we’ve stressed to them is that they need to expedite that process and work very, very quickly to get it done. We’re going to continue to push for that.

Smith finds this "astonishing."

Axelrod repeatedly stresses the need to get “this” resolved quickly. Notice the refusal to use accurate and honest language: at best, these are improprieties, but the more accurate word is fraud.

The emphasis is NOT on doing things correctly, but on the need for haste. Yes, there is what amounts to an aside on the need to have “proper” paperwork, but that is more an assertion that some foreclosures aren’t afflicted by doubts over the securitization trust that supposedly owns the note, the borrower IOU, actually having taken the steps to prefect its rights.

And this is simply a variant of the spin the banks have tried since the affidavit mess surfaced: that this is a mere “paperwork” problem.

Well put.

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