In Depth Analysis: CalculatedRisk Newsletter on Real Estate (Ad Free) Read it here.

Friday, February 13, 2009

JPMorgan, Citi, Morgan Stanley Temporarily Halt Foreclosures

by Calculated Risk on 2/13/2009 01:14:00 PM

"We believe three weeks is adequate time for the Treasury to announce – and for us to implement – a new plan."
Jamie Dimon, CEO JPMorgan in letter to Congress
From CNBC: Three Big Banks Are Halting Foreclosures for Now
Citigroup, JPMorgan Chase 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 Obama plan under consideration would seek to help homeowners before they fall into arrears on their loans. ... Under the evolving plan, homes would undergo a standardized reappraisal and homeowners would face a uniform eligibility test ...
Another "evolving plan". I think they will discover that there is no easy method for successful loan modifications (as FDIC Chairwoman Sheila Bair discovered when they took over IndyMac). I guess the plan is to buy down loans with the $50 billion - or pay a portion of the monthly payment.

The details will be interesting. I'm curious - how do you measure success when the borrowers aren't already in default?