According to an article in the Dallas Morning News, JPMorgan Chase & Co., Morgan Stanley and Bank of America announced that they would halt all foreclosures on owner occupied homes until a government plan devised to stem foreclosures is finalized or until March 6th, whichever comes earlier.

The article also said that Citigroup will extend its current foreclosure moratorium until the administration comes up with a plan to stop the rising rate of foreclosures or until March 12. President Obama has announced that he plans to spend at least $50 billion to prevent foreclosures.

This is good news for homeowners facing foreclosure . Hopefully the plan will provide reasonable terms for homeowners facing foreclosure. Homeowners facing foreclosure need to have the power to modify their mortgage loans which are often toxic; but these modifications must be fair and affordable.

Unfortunately, many mortgage loan modification programs up to this date have not been effective in preventing foreclosures. This is why we need to give bankruptcy courts the power to modify mortgages in a way that is fair to both the homeowner and the creditor. We are still waiting for that legislation to pass.

But for now, homeowners facing foreclosure who are covered by this moratorium on foreclosures should take a look at their complete financial picture. If you’re a homeowner facing foreclosure and you have other debts that are delinquent with little income to repay it, filing Chapter 7 or Chapter 13 bankruptcy  may be your best option. Speak with a Dallas-Fort Worth bankruptcy today to find out about your options.