Citigroup and JP Morgan Suspend Foreclosures
Both Citigroup Inc. (C) and JP Morgan Chase (JPM) announced Friday they have enacted temporary foreclosure moratoriums. The news comes one day after House Financial Services Committee chairman Barney Frank and the Office of Thrift Supervision urged financial institutions to halt foreclosures, until lawmakers have had time to hash out the details of a "comprehensive" plan to address the housing crisis. For three weeks, "we will not add to the foreclosure process any new owner-occupied residential loans that are owned and serviced by JP Morgan Chase," wrote JP Morgan CEO Jamie Dimon in a letter to Frank. "We believe three weeks is adequate time for the Treasury to announce -- and for us to implement -- a new plan." Citigroup said its 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. A Treasury staffer said Tuesday, according to a MarketWatch report, that the modification program could resemble a proposal introduced by Federal Deposit Insurance Corp. Chairwoman Sheila Bair — a loss-sharing program between mortgage servicers or investors and the FDIC that deals with loans that fail six months or longer after being modified. Treasury Secretary Timothy Geithner suggested the plan will be presented in a few weeks. Although, according to Frank, that's "too much time." Write to Kelly Curran at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.