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Home General News Mortgage Industry Articles Big banks place moratorium on some foreclosures
Big banks place moratorium on some foreclosures PDF Print E-mail
Written by By: Reuters   

Citigroup Inc, JPMorgan Chase & Co, and Morgan Stanley said they had placed a moratorium on foreclosing on some home loans to give the government time to launch a $50 billion mortgage relief program.

The moratorium announcements come days after major bank chief executives committed to pausing mortgage foreclosures at a Congressional hearing.

Foreclosures have skyrocketed during the mortgage crisis. The National Association of Realtors said on Thursday that sales of foreclosed homes helped drag the median price of existing homes to its lowest level since 2003.

Citigroup said its moratorium, which started on February 12, will last until either President Barack Obama has finalized the details of a program for modifying mortgages, or until March 12, whichever comes first. It applies to mortgages that Citi owns, to borrowers living in their homes.

Morgan Stanley's moratorium started this week, and will last until March 6. It applies to the bank's Saxon unit, which collects payments on loans.

JPMorgan Chase & Co said its moratorium will last through March 6, which it believes is enough time for the Treasury to announce a new mortgage modification plan.

U.S. Treasury Secretary Timothy Geithner on Tuesday announced a plan to stabilize the financial system. One element of the plan is $50 billion of assistance to "prevent avoidable foreclosures" of middle-class homes occupied by their owners, according to a document Geithner released.

 Copyright 2009 Reuters. Click for restrictions.