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Lenders Throw Lifeline to Struggling Borrowers
A new plan pauses foreclosure actions while new repayment plans are worked out
By Jim O'Neill
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Posted Feb 12, 08 6:58 AM CST
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(Newser)
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Six top US mortgage lenders will launch a program today aimed at helping at-risk borrowers avoid foreclosure. Aimed at homeowners more than 90 days delinquent on loans, Project Lifeline will forestall foreclosure actions for 30 days while lenders try to work out new payment options, reports the Wall Street Journal. Contact with borrowers could begin this week.
The plan, backed by the Bush administration, helps almost any borrower, not just those with subprime loans. It comes in the wake of a December plan that froze interest levels on many adjustable rate mortgages. Washington Mutual, Bank of America, Wells Fargo, JP Morgan, Citigroup and Countrywide—participants in what's called the Hope Now Alliance—carry about 50% of all US mortgages. Delinquencies have swelled and experts say a million homes could enter foreclosure this year.