Five US banks to halt foreclosures 3 weeks

Bloomberg

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Citigroup, JPMorgan Chase, Bank of America, Morgan Stanley and Wells Fargo agreed to suspend foreclosures while the Obama administration crafts a housing plan to modify mortgages for troubled borrowers.

Citigroup halted foreclosures through March 12, or when a plan is completed, the company said Friday in a statement. Wells Fargo said its moratorium was in place until a plan is announced. The other lenders said foreclosures will be halted on owner-occupied homes until March 6. JPMorgan Chief Executive Officer Jamie Dimon disclosed his actions in a letter to House Financial Services Committee Chairman Barney Frank released Friday.

Adequate time

Frank asked chief executives of eight banks at a committee hearing Feb. 11 to freeze foreclosures until Treasury Secretary Timothy Geithner sets up a program. Citigroup’s Vikram Pandit committed to a halt. The Office of Thrift Supervision urged savings-and-loans to suspend foreclosures until a plan is ready.

"Three weeks is adequate time for the Treasury to announce - and for us to implement - a new plan," Dimon wrote to Frank. "We stand ready to work with you to put the appropriate process in place, including a national modification standard."

U.S. President Barack 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. JPMorgan, Citigroup, Bank of America, Morgan Stanley, Goldman Sachs, Wells Fargo, State Street Corp. and Bank of New York Mellon CEOs faced lawmakers last week over use of $165 billion in rescue funding, including bonuses and compensation. The banks got $125 billion from the Troubled Asset Relief Program in October, and Citigroup and Bank of America each got another $20 billion.

"Citi is taking the necessary steps to help American homeowners keep their homes," according to the statement. The company said it worked with about 440,000 borrowers to stop foreclosures since the start of the housing crisis in 2007.

Morgan Stanley said its Saxon Mortgage Services Inc. handled billing and collections on $26.6 billion of loans as of Sept. 30, 2006, before the business was acquired.