Banks Give Foreclosures a Vacation

As the government works out a rescue plan for homeowners banks give foreclosures a weeks vacation.

Friday both JPMorgan Chase and Citigroup Inc, the first banks to do so, announced they will be temporarily halting foreclosures as the government works to finalize the details of a financial rescue package that could include billions of dollars to aid struggling homeowners.

Lawmakers have begun to put pressure on financial institutions to suspend foreclosures until the plan comes out.


Citigroup said it would make its moratorium on foreclosures effective February 12th and will stay that way until March 12th, or until President Obama's Administration finalizes the details of its loan modification program.

The moratorium only applies to a borrowers principal residence and loans that Citigroup services and understanding has been reached with investors.

JPMorgan has agreed to issue the foreclosure moratorium through March 6.

On Tuesday Treasury Secretary Tim Geithner outlined the Administrations priorities for the use of the second half of the $700 billion allocated for the Troubled Asset Relief Program, which would include spending $50 billion on foreclosure relief.

The details of the plan however have yet to be worked out.

Both companies have suffered major losses as delinquencies rise amid the turmoil of the housing market.

This sounds like a good thing and hope other banks will follow Citigroup and JPMorgans lead. People need a breather to get away from the stress foreclosure. A vacation does a foreclosure good.