Lenders agree to foreclosure moratorium
WASHINGTON - Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp., Morgan Stanley, and Wells Fargo & Co. agreed to suspend foreclosures while the Obama administration crafts a housing plan to modify mortgages for troubled borrowers.
Citigroup will halt foreclosures through March 12, or when a plan is completed, the company said yesterday.
Wells Fargo said its moratorium is in place until a plan is put in place. The other lenders said foreclosures will be stopped on owner-occupied homes until March 6.
Government-controlled mortgage finance companies Fannie Mae and Freddie Mac said yesterday they have immediately suspended all foreclosure sales involving occupied single-family homes and 2-4 unit properties through March 6, to give troubled borrowers more time to negotiate with their loan servicers.
"Three weeks is adequate time for the Treasury to announce - and for us to implement - a new plan," JPMorgan chief executive Jamie Dimon wrote in a letter to House Financial Services Committee chairman Barney Frank, in a letter released yesterday. "We stand ready to work with you to put the appropriate process in place, including a national modification standard."
Frank asked chief executives of eight banks at a committee hearing Wednesday to freeze foreclosures until Treasury Secretary Timothy Geithner sets up a program.
President Obama will give details on his housing proposals next week during a two-day trip to Denver and Phoenix to talk about the next steps in his strategy to revive the economy, according to White House press secretary Robert Gibbs.
JPMorgan, Citigroup, Bank of America, Morgan Stanley, Goldman Sachs Group Inc., Wells Fargo & Co., State Street Corp., and Bank of New York Mellon Corp. got $125 billion from the Troubled Asset Relief Program in October. Citigroup and Bank of America each received an additional $20 billion.