OTS Urges Suspension of Owner-Occupied Foreclosures

The Office of Thrift Supervision is urging federally chartered thrifts to suspend all foreclosures of owner-occupied homes until the Treasury Department finalizes a comprehensive housing plan to prevent foreclosures. Treasury secretary Timothy Geithner is expected to unveil a new home loan modification program in a few weeks that may include loan guarantees for newly modified loans. The new administration wants to use $50 billion of the Troubled Asset Relief Program funds to bring down mortgage payments and reduce mortgage interest rates on troubled loans. It is expected to include a mortgage interest rate buydown component. "OTS-regulated institutions would be supporting the national imperative to combat the economic crisis by suspending foreclosures until the new plan takes hold," OTS director John Reich said.