House Financial Services Chairman Barney Frank (D.-Mass.) received a letter last week from JP Morgan Chase CEO Jamie Dimon announcing a three week foreclosure moratorium.
This just a day or so after Frank had called on mortgage servicers to impose a foreclosure moratorium to delay unnecessary foreclosures until the Obama adminisaration announces the housing details of the recently passed stimulus plan on Wednesday.
Here is the Chase CEO, Jaimie Dimon’s letter to Barney Frank:
February 12, 2009
The Honorable Barney Frank
2252 Rayburn Building
Washington, DC 20515Dear Chairman Frank:
As I noted during yesterday’s hearing in the House Financial Services Committee, JP Morgan Chase has worked hard to be at the forefront of foreclosure prevention and modification efforts to keep families in their homes.
Yesterday, you proposed a temporary foreclosure moratorium, and Congressman David Scott subsequently asked lenders to commit to a three-week moratorium until Treasury implements a new modification plan.
Today we have initiated a foreclosure moratorium through March 6, 2009:
We will not add to the foreclosure process any new owner-occupied residential loans that are owned and serviced by JPMorgan Chase. This moratorium replicates the 90-day foreclosure freeze we announced on October 31, 2008. We believe three weeks is adequate time for the Treasury to announce – and for us to implement – a new plan.
We stand ready to work with you to put the appropriate processes in place, including a national modification standard, to reduce the incidence of foreclosure and to encourage long-term, sustainable home mortgages.
Sincerely,
Jamie Dimon
President Obama is scheduled to reveal the details of his housing plan in a speech in Phoenix, Ariz., on Wednesday.
Yesterday, Barney Frank had appeared on CBS’s “Face the Nation,” and said he did not think $50 billion would be enough.
When asked by CBS host Bob Schieffer, Frank said, “I don’t think it will be enough,” said Frank. “But in fairness to Mr. Geithner, we won’t know that for a while. I believe that he will be–he’s got a good set of plans coming forward to begin to reduce foreclosures. And by the way, we reduce foreclosures, not just to be charitable to individuals, but because the massive number of foreclosures is a major macroeconomic problem. It hurts the whole economy.
“And so what I hope is this,” said Frank. “We will begin, if in fact, by the time we’ve used $50 billion, it turns out we can use more, then I believe the Congress would be responsive. But first they’re going to have to demonstrate the will, which they have demonstrated, and the capacity to use it effectively.”
Meanwhile, on “Fox News Sunday” hosted by Chris Wallace, Obama adviser David Axelrod suggested the $50 billion mortgage bailout could double to $100 billion.
“Is the focus on reducing monthly payments, or is it going to be on getting the institutions to actually lower the principal that’s owed on those mortgages? And is $50 billion nearly enough to deal with this program?” asked Wallace.
“Well, I’m not going to deal with the details of the program, which will be announced Wednesday,” said Axelrod.
But when Wallace pushed on the issue, saying that $50 billion “seems like a drop in the bucket,” Axelrod said: “Well, there’ll be a lot of aspects to this, to this program, so–but the $50 billion obviously–$50 to $100 billion that’s been discussed to date, is obviously a necessary part of it.”
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