Reply #52: That's not necessary.

[ClarkUSA]

I can tell you that my own mortgage papers are legit and not fraudulent, for example. If I chose to default on my mortgage, there is no legal reason why my bank should freeze their foreclosure proceedings against me unless it's to re-negotiate terms.

There's a reason why banks that have paperwork problems have instituted their own moratorium. They aren't doing it out of the kindness of their heart. They are doing it because they don't want to be sued for each and every case of a foreclosure with bad paperwork.

There is no reason why foreclosures with perfect paperwork should be stopped. If creditors that have perfect paperwork cannot foreclose, that will kill the housing market and hurt the economy (and no creditor in their right mind would issue a mortgage in such an environment).

Foreclosures with imperfect paperwork should absolutely be stopped. But they are being stopped by banks, because now that lawyers have caught on to their fraudulent activity, banks don't want to be bankrupted by civil lawsuits and criminal investigations by state AGs.

In cases where a servicer continued with bad-paperwork foreclosures even after it has been shown that they are using bad paperwork, state attorney generals should open a criminal investigation on that bank (and in many states they are). You will get a self-imposed moratorium very quickly.

The only reason we might need a national moratorium is if it turns out most foreclosures have bad paperwork AND most servicers when confronted with this refuse to stop (even after threatened criminal investigations and civil suits). But this has not happened yet -- banks do not want to be prosecuted or bankrupted.