JPMorgan Chase & Co. and Citigroup Inc. are halting foreclosures for owner occupied homes. Fannie Mae and Freddie Mac had done much the same thing at the end of last year, but lifted their moratorium in early January. JPMorgan and Citigroup may be the first privately owned companies to stop foreclosing until the administration has a chance to do something constructive about the housing crisis.
Unfortunately, as my colleague, Cathy Moran noted, in her recent post, Moratorium on Foreclosures, this may be only a short lived attempt while the government looks at buying up tainted mortgages. That isn’t going to help.
We need a long term solution to this crisis, not just a couple of months of relief for those lucky enough to be included in this foreclosure stoppage. But you can bet that even if the foreclosure is stopped, the loan obligation continues to build. Then the homeowner will be further behind with no solution.
The lenders should get behind the “Helping Families Save Their Homes in Bankruptcy Act of 2009” which will offer a permanent solution fair to both the homeowner and the mortgage company.