Kevin Collison (The Kansas City Star) – Kansas City Mayor Mark Funkhouser wants Missouri to temporarily halt foreclosures until banks sort out allegations that people around the country are losing their homes due to questionable documentation.
At a Monday news conference hosted by Communities Creating Opportunity, an advocacy group, the mayor asked Missouri Attorney General Chris Koster to impose a foreclosure moratorium.
“The market is broken at the moment, and we need to take time to repair it,” Funkhouser said.
Allegations that foreclosures were issued without mortgage documents being properly reviewed, or at worst fraudulently prepared, have created uproar nationwide, with some in Congress urging an investigation.
Six other state attorneys general have suspended foreclosures to investigate the allegations.
They’re reacting to a recent decision by three major lenders, GMAC, JPMorgan Chase and Bank of America, to suspend foreclosures while they review how documents are being handled.
Koster could not be reached for comment.
At this point, the White House is resisting calls for a nationwide moratorium.
Although the mayor and CCO representatives could not cite examples of local residents losing their homes because of the improper paperwork, they said foreclosures have harmed the city. Out of the 10,000 houses currently vacant in Kansas City, Funkhouser said 3,000 are owned by banks.
“Homes owned by banks and other lenders are not an economic benefit to Kansas City,” he said. “Homes owned by homeowners are.”
There were foreclosure filings on 1,923 homes in the Kansas City metropolitan area in August, up 26.5 percent from the same month a year ago, according to the latest report by the research firm RealtyTrac.
One in every 451 housing units in the area received a foreclosure filing, ranking Kansas City 80th among the 203 metropolitan areas listed by RealtyTrac.
Within the Kansas City area, Wyandotte County had the highest frequency of foreclosures: one filing for every 288 housing units in August, up 41.3 percent from last year. Jackson County reported one filing per 332 units, up 52 percent, Johnson County, one filing per 573 units, down 20.9 percent, Clay County, one filing per 672 units, up 24.5 percent, and Platte County one per 902 units, up 64 percent.
Missouri as a whole reported 4,084 foreclosure filings in August; one for every 652 housing units, and Kansas reported 1,224, one for every 1,002 units. Missouri ranked 23rd in the nation in foreclosure activity and Kansas ranked 36th, according to RealtyTrac.
Kansas and Missouri handle the foreclosure process differently. Kansas is a judicial foreclosure state, in which a court proceeding is required before a foreclosure is filed. Missouri allows the entity that holds the title to initiate the proceeding.
Funkhouser was joined by Kansas City Council members Sharon Sanders Brooks and Melba Curls, who represent the City Council’s 3rd District.
“A lot of foreclosed homes are in the central city, and we’re concerned about this issue,” Curls said.
The mayor said a moratorium would give lenders an opportunity to review their procedures and provide owners more time to resolve their problems and keep their homes.
In its letter to Koster, officials at Communities Creating Opportunity urged the attorney general to halt foreclosures before another family lost their home to a “fraudulent foreclosure process.”
“Testimony from employees … recently revealed that the nation’s largest servicers have been signing off on as many as 18,000 foreclosure papers a month over the last few years without checking whether the information justified an eviction,” the group said.
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