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Feds Unveil Plan to Halt Foreclosures

By MARCY GORDON,

Posted: 2008-03-14 10:35:17

Filed Under: Banking, Mortgages

WASHINGTON (Feb. 12) - Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under a new initiative the Bush administration announced Tuesday.

Photo Gallery

States Hardest Hit
By Foreclosures in '07

1 of 10

State: Nevada
Total number of filings: 6,087
Percentage change from Dec.: -45
Percentage change from Jan. '07: +95

Dubbed "Project Lifeline," the new program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus on previous relief efforts.

The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.

These lenders say they will contact homeowners who are 90 or more days overdue on their monthly mortgage payments. They will be given the opportunity to put the foreclosure process on pause for 30 days while the lenders try to work out a way to make the mortgage more affordable to the homeowner.

"Project Lifeline is a valuable response, literally a lifeline, for people on the brink of the final steps in foreclosure," Housing and Urban Development Secretary Alphonso Jackson, said at a joint news conference with Treasury Secretary Henry Paulson.

He said the goal was to provide a temporary pause in the foreclosure process "long enough to find a way out" by allowing homeowners and lenders to negotiate a more affordable mortgage.

Paulson said that the new effort was just one of a number of approaches the administration was pursuing with the mortgage industry to deal with the country's worst housing slump in more than two decades.

In December, President Bush announced a deal brokered with the mortgage industry that will freeze certain subprime loans, those offered to borrowers with weak credit histories, for five years if the borrowers are unable to afford the higher monthly payments as those mortgages reset after being at lower introductory rates.

"As our economy works through this difficult period, we will look for additional opportunities to try to avoid preventable foreclosures," Paulson said. "However, none of these efforts are a silver bullet that will undo the excesses of the past years, nor are they designed to bail out real estate speculators or those who committed fraud during the mortgage process."

Participating lenders are Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co.

Copyright 2008 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.

2008-02-11 16:21:55

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977 comments

Biebeldon 11:17:48 AM Apr 05 2008

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DUMP THE FED

Biebeldon 11:17:02 AM Apr 05 2008

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We'd all be better off if we would dump the FED. They make millions pay no taxes and are the biggest problem with this country today.

Cbrforlife 10:02:29 PM Mar 14 2008

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Im just waiting for the value of these homes to reach attianable levels. No longer can a person that makes 60 or 70k a year afford a nice home unless you bought pre 2003. I am actually enjoyig seeing all these people lose their homes and overloading the market.

Skip45masi 04:12:33 PM Feb 27 2008

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no problem here in houston, TX I rent, rent is cheap, great apt

L5647 10:21:59 AM Feb 13 2008

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This won't work because the value of your home in the market has fallen so much in many markets. That it has been almost imposiable to refi the mortages even for the good credit people. The banks and all the mortage holders will have to mark down the loans or this is going to last for years and many more good credit people will just start walking away from there homes. The mortage people got greede now they have to pay-----and the goverment should make them do it------NOT THE GOOD PEOPLE!

ltim4iu2 09:29:11 AM Feb 13 2008

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THIS IS JUST MORE WELFARE FOR INSTITUTIONS THAT MADE LOANS TO PEOPLE THAT WERN'T QUALIFIED FOR THESE LOANS. THESE INSTITUTIONS CAN'T ABSORB ALL OF THESE HOMES. IT WOULD JUST MAKE MORE SLUM AREAS.

ICantCon4m 08:12:56 AM Feb 13 2008

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If a run-away nuclear fission process produces a big "ka-bang", then a chain reaction in home foreclosures produces what? Duh.
Okay, bank execs are agreeing to throw us collective "dogs" a bone. Why? Because they won't be able to enjoy their yachts with the unwashed masses clamoring at their mansions' wrought iron gates.
C'mon gang ... lessee ... where's my torch and pitchfork!

ICantCon4m 08:12:25 AM Feb 13 2008

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Cbasilovecchio 07:54:20 AM Feb 13 2008

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BASILOVECCHIO NEWS FLASH:

BANKS Say

"STOP PAYING FOR 90 DAYS"

so you can get help!! Was that their message???

Go to freddieaff.com GET HELP NOW
Help give birth to a new federal charter agency
That can turn defaulting mortgages into
(gasp) AFFORDABLE HOMES.

STOCKTONTILE 07:52:52 AM Feb 13 2008

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When will I get rewarded for paying ALL my bills on time.There always seems to be help for those people who overextend themselves.I think these lenders should send notices to people like me who do pay on time info on the foreclosures so we can have the opportunity to buy these houses at a discount.

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977 comments