Halting foreclosures...does it help or hurt?

Allegations of flawed documentation and possible mortgage fraud have been raised against major financial institutions. These allegations and the investigations that will follow have caused the foreclosure process to come to a halt for thousands of homeowners. The result is that pending sales for these properties have been halted and thousands of homes will be removed from the market.

Many of these homes will undoubtedly return to the market at a later date, slowing down the economic recovery that depends, in part, on clearing out this inventory. This also means that people who are living in homes that are being foreclosed against will be able to remain for awhile. Some have said that halting foreclosures will provide a short term benefit but be detrimental in the long term.

What do you think?