Foreclosure Halt

A few of the larger lenders in the mortgage industry are putting a stop to home foreclosures while the Obama Administration develops a plan to help the struggling homeowners.

President Barack Obama outlined in his speech in Arizona on Wednesday his much-anticipated plan to spend at least $50 billion to prevent foreclosures.

Arizona is one of the states hardest hit by the crisis.

It contained outlines of a foreclosure-relief effort but few details.

Though lenders have beefed up their efforts to aid borrowers over the past year, their action hasn't kept up with the worst housing recession in decades.

More than 2.3 million homeowners faced foreclosure proceedings last year.

Government-controlled mortgage finance companies Fannie Mae and Freddie Mac, and major banks JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. said Friday they are halting foreclosures through March 6.

New York-based Citigroup Inc. said it will extend until the administration has completed the details of the loan modification program or March 12, whichever is earlier. Citi's action expands on a similar effort it started in November.

The banks' pledges apply to owner-occupied homes, not those owned by investors.

Fannie Mae said it was suspending all foreclosure sales and evictions for occupied properties, while Freddie Mac said its suspension would apply to properties with up to four units and noted that the ban would not apply to vacant properties. Both Fannie and Freddie had suspended foreclosure sales during the winter holidays and halted evictions from foreclosed properties through the end of this month. Together, they own or guarantee around half of U.S. home loans.

Fannie and Freddie have developed systems to determine which loans need to be modified.

To qualify for those programs, borrowers have to be at least three months behind on their home loans.

The top executives of Bank of America, and Citi announced their intention to halt foreclosures under questioning Wednesday by House lawmakers.

Jamie Dimon, JPMorgan's chief executive, detailed his plans in a letter to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, who released it Friday.

"We stand ready to work with you to put the appropriate processes in place, including a national modification standard, to reduce the incidence of foreclosure and to encourage long-term, sustainable home mortgages," Dimon wrote.

Information from CAR