Major Banks Announce Halt in Foreclosures for One Month; Await Obama Plan Details

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As the spending stimulus package passed the House and Senate on Friday, lenders large and small took action to stem the tide of foreclosures (1 every 13 seconds) until more details were revealed about President Obama’s $50 billion plan (that’s the portion of the stimulus devoted to foreclosures, according to the AP).

Fannie Mae, Freddie Mac, JPMorgan Chase & Co., Morgan Stanley, Citigroup Inc. and Bank of America Corp said they were halting foreclosures for at least a month on Friday, followed by many smaller banks around the country.

This amounts to a triage until they can come up with a permanent solution,” said Anne L. Weintraub, a Sarasota attorney who specializes in real estate. “Banks are finally trying to come up with an alternative to foreclosure because it’s expensive and they don’t want to become property managers.

I hope the good folks making these decisions (politicians, big banks, etc) realize the implications on the business of lending that their actions will have. The incentive to lend money is fast disappearing . . . I better collect on the $10 bucks I lent to my buddy before that is also deemed unfair by the government!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.