Big Servicers Declare 30-Day Foreclosure Halt.

Washington -- Under the auspices of the Bush administration, six of the nation's largest residential servicers controlling almost 60% of the market in February unveiled a new program to freeze for 30 days all foreclosures - prime and subprime alike - on loans under their control.

The moratorium, however, does not apply to borrowers who already are in foreclosure, loans on "investor properties" or homes that are currently vacant.

The six participating lenders in the effort, dubbed Project Lifeline, include Bank of America, Citigroup, Countrywide Financial, JPMorgan Chase, Washington Mutual and Wells Fargo, which together service $5.4 trillion in outstanding residential loans, according to figures compiled by National Mortgage News and the Quarterly Data Report. (BoA is in the process of buying Countrywide, the nation's largest lender and servicer.)

Mark Zandi, chief economist for Moody's Economy.com, predicted that the effort will assist only a small fraction of the estimated 425,000 homeowners who are 90 days or more delinquent on their loans.

According to the QDR, roughly 8% of all subprime loans ($80 billion out of $1 trillion in outstandings) are in some form of foreclosure. Over the past five months, Wall Street firms, banks and others have written down the value of their subprime investments by roughly $120 billion.

Meanwhile, investors are concerned that if the nation's three largest bond insurers - Ambac, MBIA and FGIC - cannot stabilize their capital positions, the ...