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?