This arrangement is attractive to a delinquent homeowner because the months-long foreclosure process is a black mark on a credit report.
For now, bank executives are not making any predictions how long the foreclosure halt will last.
The federal government has long portrayed foreclosures as a crucial national problem, but ever since the financial crisis began, it has failed to find solutions.
The bill is one of the most far-reaching state proposals to address the crisis in subprime lending and foreclosures, and it recalls the long-term foreclosure moratoriums that provided relief to homeowners in the 1930s during the Great Depression.
An eight-month study released yesterday by Pennsylvania officials confirms what many residents of the Pocono Mountains have long suspected: foreclosures have reached stunning levels, especially among homebuyers new to the area, many of whom paid more than market value for their homes.
"For a long time, foreclosures really set the market in all price categories," McClintock said.
Unfortunately, the latest attempt to prioritize states for federal housing relief did not use a measure of real need, like long-term foreclosure rates, but instead looked at housing depreciation, locking 45 states, out of 1.5 billion dollars in housing relief.
He said the state attorneys, long steeped in foreclosure issues, had extensive knowledge of the problems and needed solutions.
A small number of others achieved "dignified exits," in which they stalled foreclosure long enough to find other housing.
Providing the grant, he added, helped prevent a long and uncertain foreclosure process that would have likely caused the repairs to have gone undone even longer.
