Lenders Freeze Foreclosures But It is Still Not a Happy Holiday
December 11th, 2008 by 
Joseph Smith
Last month some financial organizations promised to delay foreclosures for the holidays. JPMorgan Chase (JPM) promised not to add loans into foreclosure process in the next 90 days. They also wanted to help 400,000 borrowers keep their homes by adjusting their loans, opening loan counseling centers and to reach out to problematic borrowers.
But, there were reports that some Chase borrowers received mortgage notices talking about loss mitigations. Chase even sent men with silver suitcases to deliver documents for signing due on Christmas.
Spokesman for Chase Thomas Kelly explained that these incidents are cases owned by other lenders with Chase only as collector.
Fannie Mae and Freddie Mac also froze foreclosures from November 26 to January 9. No taking over or evictions will occur within these dates. Spokesman Brad German explains that Freddie Mac may still process some foreclosures, but does not intend to take over yet. By December 15 they wish to finalize their plans so that borrowers can modify their loans and prevent foreclosure.
Fannie Mae and Freddie Mac are patterning initiatives by the Federal Insurance Corp. They are aiming to decrease mortgage payments by 38 percent of the borrower’s income.
Florida Governor Charlie Crist has a similar deferring tactics. With the Florida Bankers Association, foreclosures are on hold for the next 45 days.
The Federal Reserve declared that it would propel another $800 billion for the economy and half a trillion dollars for purchasing of mortgage-backed securities. Then another $700 billion will be spent by the Treasury Department to purchase stocks in banks to encourage lending.
Though the government is trying to find a solution to foreclosure, it is reported that more than 4 percent of homeowners are late for their payment in this quarter. Last year only 2.5 percent had delayed payments. It is feared that it will further increase to 5 percent by the next quarter.
