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Lenders Continue Foreclosures, Despite Moratoriums

Lenders who have pledged to halt foreclosure proceedings are apparently proceeding with foreclosure actions anyway, according to a recent %{=FONT-STYLE: italic}""BusinessWeek"":http://www.businessweek.com/bwdaily/dnflash/content/dec2008/db2008123_362200.htm% report.
A number of major banks, including ""JPMorgan Chase"":http://investor.shareholder.com/jpmorganchase/press/releasedetail.cfmxReleaseID=344473, ""Bank of America"":http://newsroom.bankofamerica.com/index.phpxs=press_releases&item=8272, ""Citigroup"":http://www.citigroup.com/citi/press/2008/081111a.htm, as well as Connecticut's ""Webster Bank"":http://websteronline.mediaroom.com/index.phpxs=press_releases&item=210, have announced foreclosure moratoriums ""in the spirit of the holidays."" ""Fannie Mae"":http://www.fanniemae.com/newsreleases/2008/4531.jhtmlxp=Media&s=News+Releases and ""Freddie Mac"":http://www.freddiemac.com/news/archives/servicing/2008/20081120_foreclosure-suspend.html have also followed suit, and many institutions say that it is pretty standard practice for lenders to halt foreclosures and evictions during the holiday season even if they haven't publicized the action.
But according to letters and comments received from a number of %{=FONT-STYLE: italic}BusinessWeek's % readers, who themselves are behind on their mortgage payments, they are still receiving foreclosure notices and late-night knocks on the door from couriers requiring signatures on documents.
One homeowner wrote, ""They have not stopped the foreclosure process on my home. I have to pay $4,800 on Christmas.""
According to a spokesperson for Chase, who led the way with a 90-day foreclosure freeze issued on October 31, in some cases loans are owned by another lender and Chase is just collecting payments. In those situations, Chase has to proceed down the foreclosure route, he told %{=FONT-STYLE: italic}BusinessWeek%. In the example the magazine cited though, the delinquent loan was ultimately owned by Freddie Mac, who along with its sister financier Fannie Mae, promised to stop foreclosure proceedings and evictions on all occupied single-family homes between November 26 and January 9.
Brad German, a spokesman for Freddie Mac, told %{=FONT-STYLE: italic}BusinessWeek% that his company is continuing to process foreclosures so paperwork will be in place when its streamlined loan modification program (SMP) is implemented by servicers on December 15. Homeowners, he said, won't receive final notices of foreclosure until after the first of next year.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.

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