To Stop Fraud, Do We Need a Moratorium on Foreclosures?Foreclosure anger is now hitting election

WASHINGTON, DC – A group of some 40 state attorneys general from around the country are demanding an investigation into the nation's simmering foreclosure fraud scandal. The attorneys general are looking to pressure banks into rewriting troubled loans and may call for a halt on foreclosures nationwide. The White House, however, hates the idea of a national moratorium on foreclosures, arguing that it could impede economic recovery. What's the best policy for homeowners and the economy at large? Here's How This All Started, explains Massimo Calabresi at Time: The foreclosure furor emerged initially from a deposition in a court case in Florida last month that alleged that at least one company had submitted false affidavits in support of summary judgments for foreclosure against homeowners who were in fact either current on or capable of paying their mortgages. Alerted by media reports to the possible foreclosure short-cuts by big banks and mortgage servicers, State Attorneys General began looking into the practice and found that banks and mortgage servicers had been engaging in the practice all over the country. In an effort to coordinate their investigations, the state AGs decided to work together. Several states called for a partial freeze by some of the biggest banks allegedly involved in the faulty foreclosures, including Bank of America, J.P. Morgan Chase and Ally bank. All three eventually agreed to a partial freeze. The partial freeze has snow-balled into calls from senior Democrats like Senate Majority leader Harry Reid for a national freeze on foreclosures.