WASHINGTON — The biggest players in the mortgage industry are halting home foreclosures while the Obama administration develops its plan to help struggling homeowners.
The White House said President Barack Obama on Wednesday will outline his much-anticipated plan to spend at least $50 billion to prevent foreclosures in a speech in Arizona, one of the states hardest hit by the foreclosure crisis.
“It’s not intended to be measured by one day’s market scorekeeping, but instead to ensure that the 10,000 Americans each day that have their homes foreclosed on, and the millions more that are barely getting by, are protected,” White House press secretary Robert Gibbs said Friday without providing other details.
Treasury Secretary Timothy Geithner announced a revised effort to stabilize the financial system on Tuesday. It contained outlines of a foreclosure-relief effort, but few details.
Though lenders have strengthened their efforts to aid borrowers over the past year, their action hasn’t kept up with the worst housing recession in decades.
More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007. Analysts say that number could go as high as 10 million in the coming years, depending on the recession’s severity.
Government-controlled mort- gage finance companies Fannie Mae and Freddie Mac, and major banks JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp., said Friday they are halting foreclosures through March 6.
New York-based Citigroup Inc. said its halt will extend until the administration has completed the details of the loan modification program or March 12, whichever is earlier. Citi’s action expands on a similar effort that it started in November.
The banks’ pledges apply to owner-occupied homes, not those owned by investors.
Fannie Mae said it was suspending all foreclosure sales and evictions for occupied properties, while Freddie Mac said its suspension would apply to properties with up to four units and noted that the ban would not apply to vacant properties.
Both Fannie and Freddie had suspended foreclosure sales during the winter holidays and halted evictions from foreclosed properties through the end of this month. Together, they own or guarantee around half of U.S. home loans.
Obama’s announcement next week is expected to include details about how the administration plans to prod the mortgage industry to do a better job of modifying the terms of home loans so borrowers have lower monthly payments.