The country is angry right now about foreclosures. During the month of September, the number of foreclosures rose 2.53 percent from the previous month. The current rate is one percent higher than it was this time last year, which was one of the most terrible years on record. Roughly one out of every 347 homes in the United States received foreclosure filings during the month of September.

Obviously the numbers are far worse in the black community, which was the least prepared for the recession, and the hardest hit. African Americans had a foreclosure rate that was over 70 percent higher than that of whites. Most of this is driven by higher unemployment rates for minority communities and less wealth for us to rely on during tough economic times.

Making matters more interesting, there are reports that banks have been mishandling the foreclosure process. There is evidence that shortcuts were taken to get necessary signatures on foreclosure papers in order to get people out of their homes faster. This lack of competency when handling foreclosure paperwork has only served to increase the public uproar, leading to investigations in over 40 states. The call has been for the Obama Administration to step in and halt foreclosures nation-wide, at least for a while.

The White House isn't so hot on the idea of declaring a nation-wide moratorium on foreclosures. Such a move is likely to deplete bank stocks, angering many of the wealthiest and most powerful investors in America. Also, the consumer may be hurt by such a move, since the creation of this form of financial uncertainty might make banks less willing to make home loans available to consumers. Anything that creates instability in a financial system can slow down an economic engine.

At the same time, there are quite a few Democrats, including Senate Majority Leader Harry Reid, who say that a moratorium is necessary. Also, there are going to be congressional hearings on what went wrong. It at least appears that leaders are expecting that the foreclosure process will be modified to ensure that homeowners can get the help they need to make it through the recession.


I don't think that a snap - called moratorium on foreclosures is a very good idea. State-sponsored solutions to serious economic problems should be pursued with care and moderation. Of course our government has the power to step in and shut down the entire foreclosure process, but this might scare banks into providing far fewer loans for our homes and businesses. At the same time, there's nothing wrong with tempering the banks' perpetual hunger for additional profitability by forcing them to engage in a more humane and compassionate process of foreclosure. Giving people time to make things right and a slew of additional options would be a good start. Sure, it would still increase the cost of our loans in the long-run, but it would be a reasonable trade-off.

We all know that something must be done to deal with foreclosures. I assume that President Obama agrees. The American public is certainly not going to allow him to forget about this important issue.




Dr. Boyce Watkins is the founder of the Your Black World Coalition and a Scholarship in Action Resident of the Institute for Black Public Policy. To have Dr. Boyce commentary delivered to your email, please click here.