Re: “State needs five-year moratorium on foreclosures” (Viewpoint, 11-9).
Dan Leahy offers an interesting solution to the mortgage foreclosure problem: Use the power of government to impose a moratorium on foreclosure actions.
If foreclosure is the one penalty lenders have to enforce mortgage contracts, and that power is suspended, why should anyone with a mortgage make another payment?
If Leahy thinks the $19.5 billion already trimmed from total home equity in Washington is large, what does he suppose the figure will be when payment of mortgages becomes “optional”? Real estate markets will simply freeze. Municipalities, which depend on real estate taxes, will see tax receipts drop drastically. Today’s cuts in government payrolls will look tame by comparison. And how many mortgages does Leahy think will be created without the ability to foreclose? And how many bank failures will ensue if his legislation passes?
Fortunately, there’s a judiciary upholding a constitution and a canon of contract law to protect Washingtonians and their property against such wild ideas. Still, it’s thought-provoking, and it’s a sign of the times. We need to think very hard before we throw down our pitchforks and march on Olympia with well-intentioned initiatives and populist zeal.