LOS ANGELES : City Asks Moratorium on Quake Foreclosures
The Los Angeles City Council asked President Clinton and Gov. Pete Wilson on Wednesday to declare a one-year moratorium on foreclosures of buildings damaged in the Northridge quake.
“A lot of people are being pushed out,” said Councilman Hal Bernson of Northridge.
Bernson wants the President and governor to direct federal and state banking regulators to tell lenders not to foreclose on any damaged properties involving owners who were in good financial standing before Jan. 17.
Bernson’s staff could not provide statistics on the number of troubled properties, but he believes it is in the thousands.
The councilman is seeking a moratorium retroactive to Oct. 1 for owners who are actively applying for funding to cover the cost of repairs.
Many property owners are getting hit with a double whammy, he said, because the Internal Revenue Service expects them to pay taxes on the original loan amount, rather than the foreclosed value.
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