Newspaper article The Christian Science Monitor

Holiday Cheer: Citigroup Suspends Foreclosures for 30 Days

Newspaper article The Christian Science Monitor

Holiday Cheer: Citigroup Suspends Foreclosures for 30 Days

Article excerpt

Citigroup is holding off on foreclosures and evictions for 4,000 homeowners. Fannie Mae and Freddie Mac are expected to make a similar announcement, and other financial institutions are expected to follow suit.

From a public-relations perspective, it looks ugly: On the day before Christmas a family, facing foreclosure, is thrown out on the street by its lender.

In a TV news segment about the event, the network anchor reminds viewers about the bonuses that the bankers are raking in.

So what's a bank to do?

This holiday season, some are planning to hold off on the foreclosures and evictions. Yes, Virginia, there is such a thing as a kind bank ... well, at least until January.

Starting Friday, Citigroup is giving some 4,000 homeowners 30 days without the threat of being evicted or foreclosed on. Both Fannie Mae and Freddie Mac are planning to announce a moratoriums on evictions for the holidays. Many other financial institutions are expected to follow suit in the days ahead.

The holiday goodwill comes at a time when mortgage delinquencies are at a record level and climbing. According to the Mortgage Bankers Association, the portion of loans in the foreclosure process was 4.47 percent at the end of the third quarter - up from 2.97 percent a year ago. Some 4 million homeowners are either 90 days behind on their loans or in foreclosure.

Things will get worse next year, the group projects - mainly because of the high unemployment rate.

Consumer groups applaud the eviction holiday. "It's always a good thing to give consumers more time to get paperwork and other documentation together to present a complete and persuasive case to their lenders so they can get help," says Douglas Robinson, a spokesman for NeighborWorks America, a Washington nonprofit that tries to encourage counseling for homeownership problems.

However, the eviction and foreclosure suspensions won't solve the problem, these groups point out. …

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