Who Loses in a Foreclosure Moratorium?

Pretty much everyone.

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The nation's leaders are always working with conflict. They are either in a conflict, entering a conflict, or coming out of a conflict.

Most recently, the crisis involves the shoddy paperwork in the foreclosure process. That lack of detail violated the rights of those being evicted. But who is the real loser?

It is the evictee? It probably would be if they were improperly foreclosed upon. But of the homes being taken over by banks, most mortgage holders haven't made payments in more than 18 months.

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Is it the new purchaser? It could be. The new buyer likely put money down and is simply waiting for the paperwork to be settled so he or she can move in or rent the property. What happens to those funds and/or where will he live?

What about the banks? They are still servicing the mortgage instruments that are backing the bad loans and now they can't even get the collateral that was pledged against the loan to begin with. Furthermore, if they do have a buyer, they are a stone's throw away from getting that real estate off the books. Banks don't want to hold real estate.

How about the mortgage servicers? Technically, it was their job to file the paperwork properly, and if they did not, should they have to do it again? Redoing the paperwork costs money through payroll and time.

How about the regulators? They'll have to work evenings and weekends to solve this issue as soon as possible. Of course they're getting the blame for not providing the oversight.

What about our government, state or federal? They will have to work extended hours to find out who is to blame. They will also have to come up with new regulations to keep their voters safe from future issues.

Finally, what about homeowners/tax payers? They've been doing a good job of paying their mortgage on time, but with every foreclosure in their neighborhood, the value of their home continues to drop and with this moratorium, that will continue.

Homeowners and taxpayers will ultimately pay the price of higher fees and taxes. There will be a cost from the evictee being left on the street. There will be a cost because the new buyer will file suit against the bank for not honoring their contracts. There will be a cost for consumers as banks charge higher fees to cover the bad debt on their books. There will be a cost for mortgage servicers who must still make profits amid recreating paperwork. There will be a regulatory cost as new rules making the mortgage markets move slowly. There will be the cost of higher taxes the state and federal government will charge for witch hunts, for new processes, and for bailing out those involved with this conflict. As a matter of fact, the real cost could eventually include another government bailout.

The next time you are completing a document, make sure you read over everything and dot all the i's and cross all the t's before you sign it. It will ultimately help everyone.

Kelly Campbell, Certified Financial Planner and Accredited Investment Fiduciary, is founder of Campbell Wealth Management, A Registered Investment Advisor in Fairfax, Va. Campbell is also the author of Fire Your Broker , a controversial look at the broker industry written as an empathetic response to the trials and tribulations that many investors have faced as the stock market cratered and their advisors abandoned their responsibilities to help them weather the storm.