Winter’s a-comin’: time to freeze those foreclosures
By admin on November 4, 2008
We told you last week that JPMorgan Chase is halting foreclosures for 90 days and is renegotiating billion worth of mortgages, as a means to avoid taking back thousands of homes.
Now, it seems that other lenders are following the company’s lead in an effort to re-brand the mortgage lending business as an industry that cares. But, this isn’t a totally selfless act. Yes, fewer people will get kicked out of their homes, but the banks get to have someone around to pay them something. No matter how small that amount is, it’s better than an empty house full of debt.
The Financial Times has the scoop on JPMorgan Chase and other lenders that have decided that some money is better than no money:
- The measures are expected to stave off the threat of home repossessions for 400,000 families by cutting their mortgage bills through reductions in interest rates or principal repayments and other loan modifications.
- Analysts said modifying loans and freezing foreclosures would help JPMorgan avoid repossessing hundreds of thousands of depreciating homes. Keeping customers in their homes and receiving monthly payments – albeit at a reduced rate – would benefit both the company’s image and its finances, they said.
- Citigroup revealed it had launched a similar programme of loan modifications last month. Citi said the programme, which did not involve an automatic halt to foreclosures, could eventually be extended to up to 100,000 homeowners owing some bn in mortgages.
- Bank of America also said last month it would modify mortgages for almost 400,000 borrowers with home loans from Countrywide, the mortgage lender it acquired this year. The decision was part of a deal with several state attorneys-general to resolve claims against Countrywide.
Read the full article, JPMorgan to freeze foreclosures.
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