Prohibiting Foreclosures on Select Mortgages
H.3360 would put in a place a moratorium on foreclosures of mortgages secured by residential real estate for a period of 180 days. In other words lending institutions will be prohibited for half a year from foreclosing on an owner occupied house regardless of non-payment or delinquent payments. This is essentially a redistribution from creditors to debtors, the former of which are being forced to provide free or discounted housing for the latter. This interference in the market may have the unintended consequence of reducing lending institutions willingness to provide mortgage loans for fear that they will be legally forced to accept losses on such loans.
It’s also interesting to note that this proposal to help debtors by interfering in the housing market comes just a few years after the legislature decided to redirect $10 million from the mortgage settlement fund (intended to help these same debtors) into the corporate welfare providing deal closing fund.