JPMorgan and Citigroup Announce Moratorium on Foreclosures

What's that really means? I'll let you slide for three weeks. But , we're coming for you house in a couple. Every one happy? We got into this mess by some very creative finance and some very demanding politician. Not necessary in that order. How creative we're willing to be in order to help . Let's nationalized banks and real estate! At least for a short time. Think about it... Pleople are losing their homes becuase can't afford it for whatever reason. President Obama wants to created 3M jobs. How long it will take to implement? How long before we can measure the effect. Let's nationalized it for that long.

How stupid is this? Florida also had a "moratorium" on foreclosures, just before Christmas (it would be horrible to foreclose on someone during that time - sarcasm added). All that happened was a dip in the foreclosure rate for December, and a huge upswing in January. Same thing will happen with this moratorium. The only way for this to end is for all of these over-leveraged houses to be foreclosed, losses absorbed, and re-sold, at realistic prices. The sooner this happens, the better for all of us.

the bank is overwhelmed and while a 3 week moratorium may help people for 3 weeks, it is not going to get their loan modified. Everyone wants the bank to lower their payment, but most people are not going to like what their loan mod will end up looking like. People who applied in October are now getting approved for loan mods. That's 5 months. Once the moratorium ends, the people will still lose their home. 3 weeks will not get these people back to work or get their income back to where it was a year ago. The economy is only getting worse & the banks are getting more apps for loan mods than they can handle. The problem is overwhelming - the system is broken. I know 3 weeks is not even enough time to make a dent in the # of modifications granted. Chase & Citi are usually just the middlemen - they have to go by the investor guidelines (Freddie, Fannie, & Ginnie). Maybe Obama should realize that the problem is much deeper than blaming the banks. Too many things are broken, and no one seems to be able to fix any of the root problems. A 3 week moratorium is a weak bandaid that will help no one.

The three week moratorium is not intended to be the answer-all or even a quick fix -- we know that there is no such thing. however, what it does is provide a temporaty halt to foreclosures while allowing the government - and the banks - to continue to work on other options or solutions. Take this as the positive step it is intended to be and quit being so doomsday about it. There is plenty of blame to go around for the situation we are in -- way too flexible lending conditions (that probably allowed you or someone you know to buy a home, however -- nobody was complaining then); greedy buyers hoping to cash in on the booming equity trend; horrific decisions on Wall Street; a governemtn that allowed all of this to happen even thought a fall was inevitable based on the record and rapid growth... But i am glad to see at lreast some proactive measures being taken...let's hope it is a step on the right direvftion and take this as a positive step, not just a reason to become more cynical.

In order to resolve this Foreclosures issue and to give those who are behind in their mortgage because of loss of jobs a chance to keep their homes the banks should give the home owners at least 6 months to a year time period in regards to a moratorium on foreclosures. The stimulus package hasn’t had a chance to see if it’ll work. And this may give people who were put in this situation due to unemployment a chance to do a modification and find a job. All these lay off’s has caused the American people who were paying their mortgage hardship. So if the banks truly were in the business of helping a situation most of them caused they should take a year or 6 month Moratorium on Foreclosures to help resolve this foreclosure crisis. Three weeks is not enough time. The banks need to remember that all people in trouble with their mortgages are not behind on their mortgages because they got a mortgage they couldn't afford, but because they lost their jobs due to the economy financial crisis, which was caused by our failing government representatives, corporate greed, Wall Street and bad lenders. There are almost 4 million people laid off in the last 14 months and all should have an opportunity to find a job and not be faced with a foreclosure. How is having 4million more people homeless in American going to help? This is ridiculous and instead of allowing the banks to proceed there should be a moratorium placed on them.

Is the new stimulus plan going to have a any affect on the old tarp plan? Or the help for homeowners plan passed by Bush for the foreclose problem? In other wards if the banks do not get what they won’t are they going to stop doing that plan if even they started? We are trying to get assistance Thu the H4H plan and Wells Fargo no luck yet but They appearer to have started the modification process. Or so it seems will this make it worse? Are the banks or specifically doing the H4H program?

This just in. a client called me asking my advice on an unsolicited modification offer he just received. He is not past due or delinquent on anything inclluding this WAMU mortgage. The offer from WAMU a division of J.P. Morgan Chase acknowledged that he was current. His WAMU mortgage is an Option Arm and was set to reset next month almost doubling his payments. This new modificaiton offer lowers his fully amortizing rate down to 1.1% and will increase by 1% each year for three years until it gets to a fixed 4.9% for the balance of the loan term which has been increased to 37 years. At first I thought it was a gimmick but after having reviewed it - it appeared to be valid. There were only three items in the modification that I questioned - none of which were important in this case. The first item I saw was that they apparantly remove any grace period from the loan payment. It says something to the effect that payments are due according to the schedule and the schedule says the first of each month. Not a major issue for someone who always makes his payments on time. I just cautioned him to perhaps make his payments a few days earlier then normal just to insure they receive it by the first. The second item I read was that he waives any litigation against the lender now and in the future for any wrong doing on their part. Meaning, that if there are any RESPA or TILA violations or any other for that matter, he cannot sue them. Again, in this case this is a non issue. The third and final issue I saw was one that I find very interesting - expecially since it is an issue I am publicizing - that of lost documents. The agreement calls for them to "resign" any documents that are lost, stolen or destroyed, thus eliminating the defense of the lender producing a true original copy of the mortgage note and proving their ownership and their rightful standing to foreclose. Again, in this case, a non issue. My client has the abhility to make his payments and default is not even a slight option worse case scenerio. But I do find it interesting as I believe more and more lenders are being challanged on their proper standing to foreclosure and are lbeing denied their forelcosres - especially in Judicial foreclosre states. Perhaps, pressure from the Congress along with the public is beginning to make a difference although this does not help those currently in default, it could prevent many from future defaults. It is a step in the right direction.

Regarding Larry Rubinoff's post, the offer from WAMU seems like a great deal, but the general release and lost document resignation are huge red flags; these items are not included in refi offers unless the loan is broken in some way, i.e., lost documents, non-compliance with federal regs or improper underwriting on origination. Hooray for his client in being able to make his payments, but times are about to get worse and it may be better to win a civil or class action settlement based on the loan defects (or even a "lottery loan", where the lender can't prove the debt because it lost the note) than whistle in the dark about the current safety in an individual situation.

Foreclosure moratoria and ring-fencing of distressed assets simply postpone the pain; it's like putting off your biopsy until next month, thus allowing the cancer more time to spread. Moreover, the motivation is purely to manage public opinion in order to avoid panic. One writer suggests not "being so doomsday about it"; conversely, one shouldn't bury one's head in the sand.