WASHINGTON — Several major banks are expanding their efforts to halt home foreclosures while the Obama administration develops its plan to help struggling homeowners.
The White House said that in a Wednesday speech in Arizona, President Barack Obama will outline his plan to spend at least $50 billion to prevent foreclosures.
"It's not intended to be measured by one day's market scorekeeping, but instead to ensure that the 10,000 Americans each day that have their homes foreclosed on, and the millions more that are barely getting by, are protected," White House press secretary Robert Gibbs said Friday.
Treasury Secretary Timothy Geithner announced a revised effort to stabilize the financial system on Monday. It contained outlines of a foreclosure-relief effort, but few details.
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More than 2.3 million homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007. Analysts say that could soar as high as 10 million in the coming years, depending on the severity of the recession.
New York-based JPMorgan Chase & Co. and Bank of America Corp. said Friday they are halting foreclosures through March 6. Citigroup Inc. said its halt will extend until the administration finalizes the details of the loan modification program or March 12, whichever is earlier.
Obama's announcement next week is expected to include details about how the administration plans to spend at least $50 billion on foreclosure prevention and establish national standards for modifying home loans.
A Democratic Senate aide said Friday that the plan is likely to include hefty incentive payments to encourage the lending industry to lower mortgage rates or reduce the total principal owed by borrowers. The idea has become attractive to Obama officials, the aide said, because it is expected to be far less expensive than having the government buy up loans out of mortgage-linked securities.