Reuters | Insight – Evidence Suggests Anti-Foreclosure Laws May Backfire

Insight: Evidence suggests anti-foreclosure laws may backfire

(Reuters) – State and federal laws enacted to protect homeowners from eviction in the wake of the 2008 housing crash may be extending the slump, according to a growing number of economists and industry experts.

Foreclosures have all but ground to a halt in Nevada, which passed one of the stiffest borrower-protection laws in the country last year. Yet the housing market is further than ever from recovery, local real estate agents say, with a lack of inventory feeding a “mini-bubble” in prices that few believe is sustainable.

A recent U.S. Federal Reserve study found that in states requiring a judicial review for foreclosure, delays associated with the process had no measurable long-term benefits and often prolonged the problems with the housing market.

Data from housing market researchers points to similar conclusions.

“Many state laws that stretch out the period for legitimate foreclosures result in no added benefit for the homeowner and produce harm to the housing finance system and to neighborhoods,” said Alfred Pollard, general counsel to the Federal Housing Finance Agency, at a House of Representatives oversight hearing in March.

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One Response to “Reuters | Insight – Evidence Suggests Anti-Foreclosure Laws May Backfire”
  1. Jason Werner says:

    A no-brainer. They’re trying to regulate fraud when it is in fact already CURRENTLY a crime. We do not need any new legislation.

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