Missouri attorney general decides against temporary moratorium on foreclosures

KANSAS CITY, Missouri - On Monday, Mayor Mark Funkhouser asked Missouri Attorney General Chris Koster to implement a temporary moratorium on foreclosures.

Koster said it would be premature to put a moratorium into place until all the facts are reviewed. A multi state working group made up of several attornies general are conducting an investigation into possible flawed foreclosure procedures. Koster's office said it would put a short term halt on foreclosures if, in fact, it is determined there was wrongdoing. 

Kansas City Missouri homeowners have been among the hardest hit during the economic downturn.

Thousands of families in Kansas City are facing foreclosures. The city was one of the worst hit in the state because realtors say the city has an abundance of low income housing.

Kansas City has about 10,000 homes that sit vacant right now - many of them are empty because of foreclosures.

Funkhouser, along with a community advocacy group Communities Creating Opportunity (CCO), asked Missouri's Attorney General Chris Koster, to put a temporary moratorium on foreclosures as a way to keep families in their homes.

This comes as four banks announced they would stop foreclosures in many states after some concern those banks used flawed foreclosure paperwork.

The problem is that the call to stop the foreclosure process doesn't apply in Missouri for most of those banks so foreclosures for the most part will continue unless the attorney general steps in.

Dozens of other attorneys general have vowed to do so.

Funkhouser said Monday, "The markets are regulated for a reason and we just need to pause and have the A.G. take a look and give us a chance."

While it may sound great to struggling homeowners to get tough with banks, some real estate experts say a blanket halt could further depress future home prices and store up an inventory still likely to face foreclosure.

It's too early to tell if any Missouri homeowners have been victims of fraudulent practices but the CCO said foreclosures are a major problem for the Show Me state. CCO said one in 652 Missouri homeowners face foreclosure.

The banks short term freeze on foreclosures is already in effect in Kansas. Kansas, unlike Missouri, requires a judicial process before a foreclosure is finalized.

 

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