Yesterday Massachusetts became the first state to take an aggressive move in blocking foreclosures when Governor Deval Patrick announced measures to protect homeowners facing foreclosure. 

Excerpt from a Commonwealth of Massachusetts press release:  In an ongoing response to the state’s foreclosure crisis, Governor Deval Patrick today directed Commissioner of Banks Steven L. Antonakes to seek delays from mortgage lenders, on a case-by-case basis, for any Massachusetts homeowner who has filed a complaint with the Division of Banks as part of their consumer assistance outreach efforts.

The Massachusetts Attorney General has framed this announcement as a measure to "combat predatory lending practices", but some media outlets have declared the move to be a "moratoriam on foreclosures." 

Note that Governor Patrick's press release emphasizes the "case by case" nature of the measure.  As written it would appear that the measure may be largely symbolic, but in practice placing a new bureaucratic hurdle in the foreclosure process may materially impact the risks that mortgagee banks assume.  This, on top of the ongoing subprime debacle, may continue to pull liquidity out of the market and if left unchecked will have the effect of increasing costs to borrowers and lowering the availability of funds.  This, I'm sure, is not what the government and community groups had in mind. 

The government should move aggressively to identify and prosecute companies that illegally engaged in predatory lending tactics, but new regulations are not the cure for what ails this market.