The Obama administration said it does not support halting foreclosures nationwide on the grounds that it could delay and hurt a recovery in the housing market.
Federal Housing Administration commissioner David Stevens and White House senior advisor David Axelrod made statements over the weekend saying that "valid" foreclosures should be allowed to move forward while institutions review their foreclosure procedures and paperwork.
Late last week Bank of America temporarily halted foreclosures in all 50 states, pending a review of their practices. Ally Financial and JPMorgan Chase have moratoriums in 23 judicial states.
With election day nearing, political pressure is building for a national foreclosure moratorium, but with the White House shooting down the idea it appears regional, multi-state moratoriums pushed by state attorney generals is the only thing that might happen.
"We believe freezing foreclosures for all banks in all states, whether we have a reason to believe them to be in error or not, is simply not the prudent step to take in this fragile housing market," FHA chief Stevens said in a published email.
Axelrod told CBS News that administration officials are working with institutions that have halted foreclosures to review their paperwork.
"We're working with these institutions. I'm not sure about a national moratorium because there are, in fact, valid foreclosures that probably should go forward," Axelrod said on 'Face the Nation.'
The president's advisor noted that the foreclosures issue has created a lot of uncertainty in the housing market. "It's bad for the housing market and it's bad for these institutions, which is why they're scrambling."
Stevens warned about overreacting to the foreclosure issue, which is drawing increased national attention.
"While we understand the eagerness to make sure that no American is foreclosed upon in error, we must be careful not to overreach and apply a remedy that will make the underlying problem of foreclosure worse," the FHA commissioner said.
