Blanket foreclosure moratorium a “disaster”

October 11, 2010 04:30PM

Though the banks are trying to work through the foreclosure mess as quickly as possible, putting a blanket moratorium on foreclosures now “will be a disaster for banks and the housing market, and the market won’t hit bottom,” said Steven Moore, senior economic writer for the Wall Street Journal, in the CNBC video above. “This crisis could not have come at a worse time,” Moore said, though he pointed out that, three weeks before the general election, it is playing into the hands of politicians, since it’s “a good populist issue.” According to CNCB’s David Faber, the key question is how to work through this crisis and how long it will take. “You need to sort of set the bottom,” he said. “To the extent that you delay sales of foreclosures, and have them out there weighing on the market, you won’t see prices hit where you attract buyers.” Moore also noted that these three or four extra months that banks can’t get payments will have a negative impact on the market as well.