Philadelphia is suspending sheriff sales on owner-occupied properties with adjustable-rate mortgages for 30 days. Mortgage banking lawyers are expected to intervene swiftly.
Faced with political pressure, Philadelphia Sheriff John Green has decided to suspend sheriff sales for the month of April.
The City Council today unanimously passed a resolution calling on the sheriff and the President Judge of the Court of Common Pleas to enact a moratorium on sheriff sales, Shoshana Bricklin, legislative counsel for City Councilman Curtis Jones Jr., told MortgageDaily.com in a telephone interview.
"The President Judge was already on board with all of this," she said, adding that word came during the council meeting that the sheriff had decided to stop sales during April.
The sheriff, who is expected to ask the court for a six-month moratorium, was responding to political pressure from the city council, Bricklin said.
"The sheriff is nothing if not a political animal; he's elected," she explained. "He can look good by ... stopping this for a moment."
Bricklin said lawyers representing the mortgage industry are expected to intervene. But she noted that the goal of the move, which is not a solution, is to provide more time for lenders and borrowers to work out an alternative to foreclosure.
"With a moratorium," Bricklin continued, "the hope is, in Philadelphia, that we can bring some of these lenders -- even the national lenders -- to the table with representatives of the borrowers, come up with some standardized uniform language ... for loan modifications."
Subprime foreclosures in Philadelphia are expected to number 45,470 and cost the city $2.4 billion, ACORN said in a statement applauding the sheriff's decision.
"His decision today to suspend sheriff sales will give borrowers the breathing room to negotiate fixed loan modifications and send a real message to the lenders that they need to increase the number of modifications in Philadelphia," ACORN member Yajaira Rivera said in the announcement.
ACORN blamed many of the foreclosures on predatory lending -- against which it has campaigned for years.