A leading lender has announced it will impose a temporary foreclosure moratorium following calls by two Solano County government bodies hit hard by the sub-prime mortgage crisis.Chase Home Lending CEO David Lowman announced the bank has implemented a temporary foreclosure moratorium in all Solano County cities, said Bob Gnaizda general council for Greenlining Institute, a California-based national nonprofit promoting home ownership for those living paycheck to paycheck.
“We met with (Chase officials) last week and suggested a moratorium, but they said no,” Gnaizda said. “But Faith Bautista of Mabuhay (Alliance) gave them a persuasive argument explaining why they should reconsider. On Friday, they called to say they would.”
Last month, Mabuhay Alliance, a Filipino-American organization, spearheaded an effort to get both the Vallejo City Council and the Solano County Board of Supervisors to call for a foreclosure moratorium by lenders. Local governments have been hit hard by the crisis due in part to reductions in property assessments and real estate transfer taxes.
A similar moratorium effort was launched in San Diego, but was less successful, Gnaizda said.
“I was surprised,” Gnaizda said. “I didn’t think they’d be able to get 630 signatures in less than 10 days to get the issue before the City Council. I didn’t think they’d get near that many.”
Chase spokesman Tom Kelly said the firm was already working on a mortgage modification program, but that input from community groups like Mabuhay were taken into account. He also said the foreclosure moratorium encompasses the entire country.”It makes sense to keep families in their homes when possible,” he said. “We serve about 10 million mortgages and this program will help about 400,000 nationally.”
While other lenders are considering similar programs, Chase is on the leading edge of this movement, Kelly said.
Chase will modify all its qualified troubled mortgages, and apply a 30-to 90-day foreclosure moratorium, until the modifications are made, Gnaizda said.
Chase also plans to open 24 foreclosure clinics nationwide, including possibly in Solano County, Kelly said. Chase has also agreed to participate in a foreclosure clinic in Vallejo next month during which loans will be modified, he said. Participants are asked to bring their most recent mortgage statement and/or loan documents, said Mabuhay official Francis Neri of Vallejo.
“JP Morgan Chase is the first major bank which confirmed its participation in the foreclosure clinic, but others will be there,” he said. “This is the real thing. We’re trying to save people from being victimized by scammers, and there are plenty of them out there.”
Other lenders will also likely participate, though whether they’ll have implemented a foreclosure moratorium by then, is unclear, Gnaizda said.
“We hope they all jump on that bandwagon,” he said. “The idea is to both save homeowners and also to re-write the type of mortgage loans available.”
Gnaizda said he’s convinced widespread relief for homeowners and new rules to prevent a similar meltdown in the future, will be among the first orders of business for whoever wins the general election.
“I think these efforts will make a difference, no matter whose president,” he said.