PNC Financial Launches Foreclosure Moratorium

By: Joseph Smith

Following the examples of mortgage giants JPMorgan Chase, Citigroup, Bank of America and government corporations Fannie Mae and Freddie Mac, PNC Financial Services Group also launched its own foreclosure moratorium for its troubled borrowers until March 13 or after the release of the details of Obama’s foreclosure plan.

PNC's moratorium plan also covers mortgage loans issued by National City Mortgage which it acquired on December 31, 2008. The shares of PNC dropped by 8.8 percent, the morning of the announcement of the moratorium.

Just like the moratoriums imposed by other banks, PNC's moratorium was also aimed at helping Obama in his efforts to solve the foreclosure crisis. Obama is set to launch his foreclosure plan in Phoenix, one of many cities devastated by foreclosed properties and falling home prices.

PNC Financial also said it will help its troubled mortgage borrowers in other ways. Its loan modification scheme will include reduction in interest rates, extension of payment terms and offer of forbearance agreements and flexible payment plans. To show its commitment to its mortgage assistance plans, it has increased the number of professionals who will assist troubled borrowers.

PNC Financial's efforts to help mortgage borrowers will certainly boost Obama's efforts to help prevent further foreclosures, in addition to efforts by mortgage giants JPMorgan Chase, Bank of America and Citigroup.

According to Jamie Dimon, chief executive of mortgage giant JPMorgan Chase, the company will suspend foreclosures on homes which are occupied by the owners through March 6, 2009. In a letter sent to House Financial Services Committee Barney Frank, Dimon vowed to work with the government to contribute to the resolution of the foreclosure crisis.

At the same time, Citigroup also explained that the foreclosure moratorium will apply to all home loans issued and serviced by Citigroup and owed by borrowers presently occupying the homes specified on the mortgages. The moratorium will be enforced until March 12, or until the Obama administration releases the guidelines of its mortgage loan modification scheme, whichever is earlier.

Bank of America, meanwhile, pledged that it may consider extending the foreclosure moratorium after March 6 if Obama's loan modification scheme is not yet finalized and released in three weeks.

The banks responded positively to a call by members of Congress for the country’s largest banks, especially those banks that have received assistance from the $700-billion Troubled Asset Relief Program (TARP), to suspend home foreclosures for a period until the details of the government’s foreclosure are announced. The Office of Thrift Supervision also called on savings institutions to suspend home foreclosures for several weeks.

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Joseph Smith has been educating buyers on the finer points of Foreclosed Properties purchase at for over five years. Click here to visit and find more information on our Foreclosure Glossary.

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