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PolitiFact: Obama Promise No. 434 — Set a three-month moratorium on foreclosures — is a compromise

No. 434: Set a three-month moratorium on foreclosures

"I'll put a three-month moratorium on foreclosures so that we give homeowners the breathing room they need to get back on their feet."

Barack Obama, in a speech Oct. 22 in Richmond, Va.

What happened after Obama made this promise gets a little complicated, as far as where the promise stands.

A few weeks after Obama's election, the federal mortgage holders Fannie Mae and Freddie Mac announced a foreclosure moratorium starting on Nov. 26. The moratorium lasted until Jan. 31. Two weeks after that, on Feb. 13, the agencies said the moratorium would be reinstated in anticipation of a major Obama plan on the foreclosure crisis.

Meanwhile, some private banks announced their own voluntary foreclosure moratoria.

On Feb. 11, the leaders of eight major banks came before Congress to answer questions about how they were using money from the Troubled Assets Relief Program. During the hearing, Rep. Barney Frank, D-Mass., told them he expected them to stop foreclosures until the Obama administration had time to present its plan for addressing the crisis. The same day, the U.S. Office of Thrift Supervision called on institutions it regulates to voluntarily stop owner-occupied foreclosures as well.

A week later, Obama unveiled his $75 billion plan to help some borrowers with subprime or underwater mortgages refinance their loans.

Officials pledged they would release detailed guidelines for the plan in March. The day of Obama's announcement, even more banks pledged to stop foreclosures until the guidelines were released.

So Obama has not made a clear call for a three-month moratorium since taking office. But federal agencies have had a moratorium going essentially since the end of November. Obama has also announced a housing plan, and federal regulators and other leaders have called for a halt to foreclosures until the plan is in place. Obama is not meeting the letter of his pledge, but clearly a number of voluntary moratoria are in effect. Feels like Compromise.

Angie Drobnic Holan, PolitiFact staff writer

PolitiFact: Obama Promise No. 434 — Set a three-month moratorium on foreclosures — is a compromise 02/24/09 [Last modified: Tuesday, February 24, 2009 10:22pm]
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