Philadelphia to suspend some foreclosure sales

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Breaking news from Reuters: ‘Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments -- potential relief for tens of thousands of struggling debtors.’

More: ‘Sheriff John Green said he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period. His action follows a nonbinding resolution passed unanimously by the Philadelphia City Council on Thursday calling on Green to stop the sales to give borrowers more time to seek a settlement that would prevent them from losing their homes.’

The story raises questions: First, is this action legal? If I’m running a large bank and I’m trying to get my hands on houses so I can put them on the market before they fall further in value, I might want the houses now. Second, will other municipalities follow suit? My guess is that the answers are no and yes, in that order.

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Photo Credit: Philadelphia Mayor Michael Nutter, by AP.