Phila. sheriff's home sales suspended

With housing advocates predicting that the subprime mortgage crisis will hit the city hard in 2008, Sheriff John D. Green yesterday suspended sales of foreclosed properties for April and said he would seek court approval for an even longer moratorium.

His announcement came about 30 minutes after City Council unanimously passed a resolution calling on him to freeze sheriff's sales.

"We are excited about having a partnership with City Council," Green said in a news release, noting that he did not have the same support when he unilaterally imposed a 30-day moratorium in 2004.

Green said the reprieve would give his office more time to identify predatory-lending victims and to help struggling home owners. Lenders caution that any moratorium could drive some mortgage bankers out of the city, making loans costlier and more difficult to obtain for everyone.

"This is great news for people on the brink of foreclosure," said Councilman Curtis Jones Jr., who cosponsored Council's resolution with Majority Leader Marian B. Tasco. "My goal is to suspend sheriff sales indefinitely because, until we have a system that values economic justice, people should not be forced out of their homes."

Green said he would also petition the Court of Common Pleas president judge, C. Darnell Jones 2d, for an order extending the moratorium. Green did not say how long an extension he would seek.

The foreclosure crisis that has ravaged some Midwestern cities has not hit Philadelphia - the 469 properties listed for sheriff's sales in February were significantly less than the 598 in February 2007. And while the United States experienced a 79 percent increase in foreclosures in 2007, the 2,041 homes sold by the sheriff's office last year was a 7 percent decrease from 2006, according to sheriff's office figures.

Nevertheless, housing advocates predict that more than 3,200 "high-cost" loans issued in 2006 will go into foreclosure this year as two-year "teaser" rates expire and homeowners' interest rates, and payments, escalate.

Jones could not be reached for comment.

ACORN, a national housing advocacy organization that pushed for a moratorium, celebrated the announcement.

"This action is exactly the result we were looking for," said ACORN member Yajaira Cruz-Rivera, whose house in the 4600 block of Howell Street in the Northeast is in foreclosure and up for sheriff's sale in May. "Now we have to get the lenders on board."

ACORN wants banks to streamline and standardize the process for restructuring loans so that more homeowners can work out their mortgage problems.

But each lender has its own set of guidelines in approving loans, so a standardized set of rules across the board would not be feasible, said E. Robert Levy, executive director of the Mortgage Bankers Association of Pennsylvania.

Banks warn against interfering in the foreclosure process. Levy and others say lenders will stay away from places where they cannot count on a mechanism to collect on their loans that are not repaid.

"If you can't seize collateral, if the moratorium stays in place, then it sets a bad environment for doing residential mortgages," said Daniel J. Reisteter, vice president of government relations for the Pennsylvania Bankers Association.

But State Rep. John Taylor (R., Phila.) said yesterday that he would introduce legislation next week that would delay foreclosure proceedings and accrual of interest for one year, and authorize courts to set an amount the homeowner would pay monthly during the moratorium. A homeowner would have to meet the court's terms or forfeit the moratorium.

Nationally, views on dealing with the subprime crisis differ greatly by party. But here, the support for a freeze crossed party lines. The resolution by Tasco and Jones calling for a moratorium passed unanimously, and Minority Leader Brian J. O'Neill, a Republican, said, "We should be doing all we can to push the banks to do whatever they can to keep people in their homes."