Maryland Business

By: jackie.sauter

Last week, regulators asked banks to step up and suspend foreclosures until the Obama administration can put in place a plan to help homeowners.

Many others have asked for a moratorium on foreclosures over the last year or so, but the request from the Office of Thrift Supervision seemed to resonate with mortgage lenders, probably because lenders know that the government is going to put a plan in play shortly.

On Friday, Citigroup Inc., JPMorgan Chase & Co., Bank of America Corp., Morgan Stanley and Wells Fargo & Co. all agreed to halt foreclosures — for various periods of time, but most through March 6 — allowing three weeks for the government to announce a plan and lenders to implement it.

Mortgage finance companies Fannie Mae and Freddie Mac also said Friday that foreclosures have been suspended through March 6 on occupied single-family homes and two- to four-unit properties, to provide homeowners time to work out a plan with their loan servicers.

On Tuesday, Pittsburgh-based PNC Financial Services Group Inc. — which has a strong presence in Maryland — jumped on the bandwagon and said it would halt foreclosures through March 13, or until the Obama administration starts its loan modification program.

Consumers Union, the publisher of Consumer Reports, seemed pleased with the moves by lenders, but said in a statement that the short-term solution should be extended to really help struggling homeowners.

“We need a comprehensive plan to help people keep their homes for the long term,” said Norma Garcia, senior attorney for Consumers Union. “When Treasury announces its formal plan, we’d like to see a moratorium on foreclosures for six months. It should be mandatory for all lenders and servicers. We think six months would give lenders the time needed to deal with the huge backlog of pending foreclosures.”

Stay tuned: President Barack Obama is expected to announce his administration’s plan for modifying mortgages Wednesday.

DANIELLE ULMAN, Business Writer