Breaking news: A 30-day foreclosure “grace period”

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One last post, with some news in it: the Los Angeles Times and the New York Times both report tonight that major lenders will announce yet another foreclosure-avoidance plan tomorrow, this one calling for a 30-day ‘grace period’ before foreclosure proceedings start against homeowners in default.

The NYTimes: ‘Bank of America, Citigroup, Countrywide Financial, JPMorgan Chase, Washington Mutual and Wells Fargo are expected to announce on Tuesday at the Treasury Department that they will offer both prime and sub-prime borrowers who are more than three months behind a chance to halt foreclosure proceedings for 30 days and work out new loan terms.’

The L.A. Times: ‘As part of the program, borrowers who get behind on their payments will receive notice from a financial counseling service ‘instead of the big, bad bank,’ said an executive with one of the lenders. ... Foreclosure typically begins at the 90-day delinquency mark, when borrowers receive a ‘notice of default’ alerting them that they could lose their homes if they don’t pay up. The new outreach letters instead will offer delinquent borrowers a grace period in which to try to negotiate new loan terms with their lender.’

Your thoughts? Comments? Mine: this sounds a lot like a truncated version of Hillary Clinton’s call for a 90-day foreclosure ‘timeout.’ E-mail story tips to peter.viles@latimes.com.
Photo credit: L.A. Times