Today, House Financial Services Committee Chairman Barney Frank (D-MA) released a letter from JP Morgan Chase CEO Jamie Dimon announcing a three-week foreclosure moratorium, through March 6, 2009, on "any new owner-occupied residential loans that are owned and serviced by JPMorgan Chase." In a similar move, Citigroup announced today a four-week foreclosure moratorium "on all Citigroup owned first mortgage loans that are the principal residence of their customers as well as all loans Citi services where we have reached an understanding with the investor." The Citigroup moratorium is effective February 12, 2009 and extends until the earlier of March 12, 2009 or the finalization of Treasury's Affordable Housing Support and Foreclosure Prevention Plan, a component of Treasury's Financial Stability Plan.
The move by JP Morgan and Citigroup comes just after the two CEO's, along with six other CEO's of several of the nation's largest banking institutions, testified before the Committee on the accountability of the $125 billion in TARP funds received by the institutions under the Capital Purchase Program this past October. During the hearing, Chairman Frank and other Committee members, following an earlier move by the Office of Thrift Supervision urging OTS-regulated institutions to institute a moratorium on home foreclosures, requested that each CEO testifying before the Committee commit that their institution would suspend foreclosures for at least three weeks. It is expected that the remaining institutions testifying before the Committee who hold or service home mortgage loans will announce similar moratoriums in response to the Committee's request.