From the Wall Street Journal:
Lenders Step Up Effort to Avert Foreclosures
By DAMIAN PALETTA and JAMES R. HAGERTY
February 12, 2008; Page A3
Prodded by the Bush administration, six major mortgage lenders are due to announce today a stepped-up effort to rescue homeowners on the brink of foreclosure.
Under the latest plan, dubbed Project Lifeline, the lenders promise to seek contact with homeowners who are 90 or more days overdue on their mortgages. In some cases, homeowners will be given the chance to “pause” their foreclosure for 30 days while lenders try to work out a way to make the loans affordable. Lenders could begin sending letters to these borrowers as soon as this week.
Homeowners wouldn’t qualify for the program if they are in bankruptcy, if they already have a foreclosure date within 30 days or if the loan was for an investment or vacant property.
Unlike the plan announced in December to freeze interest rates at current levels on certain adjustable-rate loans, this latest effort is to involve all kinds of home loans, not just subprime mortgages, a higher-cost variety for people with blemished credit records or high debt in relation to income.
The participating banks, which service about half of the U.S. mortgage market, are Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., J.P. Morgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co. — all members of the so-called Hope Now Alliance. They are working with the U.S. Treasury and Department of Housing and Urban Development. Those two departments scheduled a briefing on the plan for 11:15 a.m. today. The plan was reported yesterday by the Reuters News Service.
Almost immediately after the Bush administration announced the freeze plan in December for certain subprime borrowers, Treasury Secretary Henry Paulson indicated an interest in developing a strategy to address a broader range of distressed homeowners.
At least 1.3 million home-mortgage loans were either seriously delinquent or in foreclosure at the end of the third quarter, according to the Mortgage Bankers Association. Not all of those loans would qualify for the program, however.
Analysts at the investment-banking firm Lehman Brothers recently estimated that the number of foreclosures will surge to one million this year and next, about four times the 2007 level.
Let the bailouts begin and here we go again something for everyone and don’t we all feel better.
This is a step in the right direction to helping Americans keep living in there homes
The holes in the dike are too big for the fingers to fill.
These people facing foreclosure are in homes they can’t really afford. Market forces are telling us that. Let free markets be.
MOST AT THE TIME OF PURCHASE COULD AFFORD THE PAYMENTS, BUT DUE TO THE ECONOMIC CRUNCH, JOBS ARE LOST, TAXES ARE UP. LETS GIVE AMERICANS A BREAK AND HELP, THIS WILL IN TURN HELP WITH THE ECONOMIC DISASTER.
And Lisa, I’m sure you have a way to separate those who could afford the payments but were dealt a low blow by the economy……from those that re-financed into a sub-prime teaser-rate cash-out bomb and spent all their equity on Escalades and LCD’s