Yesterday, I wrote about a voluntary foreclosure moratorium that numerous lenders are announcing in anticipation of the Treasury Department’s Financial Stability Plan. See the linked article above for more information.
Well late Friday afternoon, several more lenders agreed to particiapte as well. The new lenders include Freddie Mac, Fannie Mae, and JP Morgan. Citigroup also announced further guidance on how it plans to implement their company’s moratorium.
Fannie Mae and Freddie Mac are going to suspend all foreclosure sales and evictions of occupied properties until March 6.
J.P. Morgan’s CEO said, “we will not add to the foreclosure process any new owner-occupied residential loans that are owned and serviced by JP Morgan Chase” in a letter to Rep. Barney Frank (D-Mass). He went on to say the company believes 3 weeks is enough time for the Treasury Department to finaize their plan and get guidance out to lenders and servicers. I assume his means that if you’re in pre-foreclosure they aren’t going to start the foreclosure prcoess until after March 6, but you should definitely call them ASAP if they service your mortgage.
According to Default Servicing News, Citigroup’s “moratorium will last until President Obama has finalized the details of the alleged $50 billion mortgage modification program or until March 12, 2009 — whichever comes first. Citigroup’s moratorium applies to mortgages that the bank owns and were linked to homes that are the borrower’s main residence.”
What’s Next?
Rep. Frank said on Thursday he expected to see the foreclosure moratorium spread to include about 95% of the lenders in the US and it’s well on its way. Several of the banks are concerned the Treasury Department’s plan will take too long, which is why most of them are setting a 3 week limit.
In my opinion, though, if we still don’t have a plan from the Treasury Department in 3 weeks, the political pressure on the lenders will be even greater than it is now and they will have to extend their moratoriums.
It also sounds like most lenders are implementing the foreclosure suspension in different ways and with differing levels of automation. The bottom line is call your servicer.
Details, Details
Oh…and even if 95% of lenders do join the moratorium, don’t think for a minute that 95% of the homes with a foreclosure date will get a reprieve. For example, J.P. Morgan said it would stop foreclosure on the loans it services and owns. Which means that if they just service the mortgage or own it but don’t service it, the foreclosure will continue.
The bottom line is call your servicer, but the answer may still be, “we can’t help you”. If you get that answer (or if your lender says they’re not playing along, call your Congressman/woman.
Stay tuned…
Tags: citigroup, fannie mae, freddie mac, government regulation, jp morgan, lenders
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