- The Washington Times - Saturday, February 14, 2009

Several major banks are expanding their efforts to halt home foreclosures while the Obama administration develops its plan to help struggling homeowners.

The White House said President 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 score keeping, 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 details.

Treasury Secretary Timothy F. Geithner announced a revised effort to stabilize the financial system on Monday. It contained outlines of a foreclosure-relief effort, but few details.

Though lenders have beefed up 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, and analysts say that number could soar as high as 10 million in the coming years, depending on the severity of the recession.

JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp. said Friday they are halting foreclosures through March 6. 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. New York-based 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.

Mr. 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.

Testifying before House lawmakers this week, Mr. Geithner said the government would provide incentives to “try to induce economically sensible restructuring of mortgages,” but offered no specifics. A Treasury spokeswoman declined further comment Friday.

A Democratic Senate aide said the plan is likely to include hefty payments designed to encourage the lending industry to lower mortgage rates or reduce the total principal amount owed by borrowers. The idea has become attractive to Obama officials, the aide said Friday, because it is expected to be far less expensive than having the government buy up loans out of mortgage-linked securities.

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