No Foreclosure for the Holidays?

Fannie and Freddie are reportedly enacting a voluntary foreclosure moratorium for the holidays. Much obliged guv'nor! 

I've got a beef with this foreclosure moratorium. It captures everything that is wrong with how the GSEs and FHFA have handled foreclosures.

First, it moralizes the foreclosure issue. This isn't a moral issue. It's a macroeconomic policy issue and FHFA is being pennywise, but pound foolish in how it handles foreclosures. It makes no more sense to give relief over the holiday season than it does to give relief solely to those homeowners who meet some set of moral criteria (e.g., not speculators). From a macroeconomic impact perspective the only thing that matters are numbers. If we are going to moralize the foreclosure issue, then we need to talk about the lending as well as the defaults; it is very artificial to only dole out relief on some moral grounds without looking at why the relief is needed in the first place. 

Second, I'm not a fan of foreclosure moratoria generally. Foreclosures are not a binary good/bad issue. Instead, some are foolish and others are sensible. Servicers don't do a particularly good job distinguishing between them. That means that foreclosing on no one is a suboptimal solution, just as foreclosing on everyone is. It's frustrating that we are still in a largely binary world 5 years into the foreclosure crisis.  You'd think that servicers would have gotten better at sorting between the situations in which a mod makes no sense and those in which it does. But that would take a type of investment in skilled manpower that many servicers are unwilling to make, especially as that type of manpower will not be a valuable asset for more than a few years and is not locked into the firm.

Finally, how on earth is a holiday moratorium justifiable under the conservatorship? If the FHFA is going to get worked up over variations in state foreclosure timelines and get high and mighty about protecting the taxpayer, then why isn't it cracking the whip here, holidays be damned? Either this is about saving taxpayer dollars or this isn't. I don't see anything in the conservatorship statute authorizing discretionary Christmas presents. (And I'm going to have a lot of trouble swallowing a goodwill/reputational benefits explanation.) FHFA can't pick and choose when it will play Scrouge and when it will play Santa any more than it can pick and choose when to play the economics card and when to play the morality card.