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Citigroup, JP Morgan Chase Put Temporary Moratorium on Some Foreclosures

Posted on 13 Feb 2009

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J.P. Morgan Chase and Citigroup Inc. have agreed to weeks-long moratoriums on foreclosures as the government works on a financial stability plan slated to include billions of dollars aimed at keeping people in their homes.

"We will not add to the foreclosure process any new owner-occupied residential loans that are owned and serviced by J.P. Morgan Chase," the company's Chief Executive Jamie Dimon said in a Feb. 12 letter to Rep. Barney Frank (D-MA), chairman of the House Financial Services Committee. The moratorium on new foreclosure actions would remain in effect through March 6 and is similar to a 90-day foreclosure freeze JPMorgan announced Oct. 31.

"We believe three weeks is adequate time for the Treasury to announce -- and for us to implement -- a new plan," Mr. Dimon said.

Citigroup in a statement said it would place a moratorium on foreclosures for all Citi-owned first mortgage loans that are on principal residences and on loans for which understandings with investors have been reached. The moratorium is scheduled to last until March 12 unless the government finalizes a loan-modification program before that date.

Lawmakers in a congressional hearing earlier this week asked the executives of some of the nation's largest banks to institute a moratorium on foreclosures until the details of a revamped government bailout effort are announced.