Family Life

04.13.10 | FL News Team

The big banks have a message for underwater homeowners: Pay in full or send back the keys. That's what JPMorgan Chase, Bank of America and Citigroup CEOs will be telling Congress this afternoon in what promises to be a heated hearing. The banks hate the idea of cutting the balance owed on a house rather than the interest rate. The House Financial Services Committee has been pushing for banks to do more to prevent foreclosures. Both Congress and the Obama administration want mortgages written at the height of the housing bubble trimmed to current market values.

 JPMorgan will testify today that would mean a writedown of between 700-billion to 900-billion dollars for all lenders. To recover that money would mean the banks raising interest rates. That puts underwater homeowners right back in hot water and punishes future home buyers, says the bank. JPMorgan's prepared to face off against Representative Barney Frank, chairman of the House committee, in insisting that contracts be honored as they were written. Prepared testimony from all three banks have been released, but JPMorgan's takes the lead in saying "no deal" to debt forgiveness.