For the second year in a row, some of the largest mortgage lenders have announced moratoriums on foreclosures and evictions during the Christmas and New Year’s holidays.

 

Citibank said it will suspend foreclosures and evictions for 30 days, from Dec. 17 to Jan. 17, which will provide a reprieve for an estimated 4,000 borrowers.

 

“We want our borrowers to have a much less stressful time, to spend time with their families during the holidays as opposed to worrying about their homes,” said Sanjiv Das, head of the company’s mortgage division.

Other lenders halting actions during the holidays include JPMorgan Chase, Bank of America, Wells Fargo, and Fannie Mae and Freddie Mac.

 

“We’re taking this step in support of struggling families who have unfortunately found themselves facing foreclosure,” said Michael Williams, president and chief executive officer of Fannie Mae. “No family should have to face the prospect of being evicted during the holiday season.”

While the foreclosure crisis has not effected Sioux Falls the way it has in other parts of the country, the city has experienced an increase in foreclosures in the past few months. In the third quarter, the rate of foreclosure was one in every 278 homes, up 196 percent from a year before and up 116 percent from the previous quarter, according to RealtyTrac, which follows foreclosures.

 

“I think foreclosures are going to begin to stabilize,” said Craig Markhardt, a mortgage broker with Keystone Mortgage in Sioux Falls. “I think that they were increasing a little bit in the past few months, but they are beginning to stabilize.”

 

Because mortgage fraud is not as much of a problem in South Dakota as in other areas of the country, the rise in foreclosures is largely linked to the rise in joblessness and underemployment.

“Foreclosures are always going to mimic unemployment,” Markhardt said. “If unemployment is going to rise, foreclosures will rise. Our unemployment rate had not increased to the same extent that it has in the rest of the country. But now we’re seeing an increase in unemployment in South Dakota.”

 

Still, he said that foreclosed properties are becoming fewer and farther between for the new buyers with whom he works.

“I’m not seeing as many new homebuyers purchasing foreclosed properties as I had in the second and third quarter of 2009,” Markhardt said. “I don’t know of any in the pipeline right now.”

 

 

http://www.argusleader.com/article/20091221/NEWS/912210309/1001/news

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