6 mortgage lenders agree to plan to avoid foreclosures
By Noelle Knox, USA TODAY
Six of the nation’s largest mortgage lenders have agreed to expand their efforts to help homeowners avoid foreclosure, Treasury Secretary Henry Paulson said Tuesday, while warning that the worst of the foreclosure crisis still lies ahead.
The program, called Project Lifeline, will be available to people with either prime or subprime loans who are at least three months behind on their mortgage. Nearly 575,000 homeowners fit that profile at the end of the third quarter, but it’s unclear if many will be saved.
Historically, seriously delinquent borrowers have been hard to reach. Half of homeowners who lose their property through foreclosure never had any contact with their lender or servicer. Lenders typically try repeatedly by mail and phone to contact borrowers in default. It’s not known what additional methods Project Lifeline might use to reach borrowers.
No program could save every borrower, Paulson said, and, “If you can’t afford to live in a home, you’ll go back to renting.”
Those eligible will be notified by mail and will have 10 days to contact their loan servicer or a non-profit housing counselor (888-995-HOPE). In some cases, the lender will suspend foreclosure proceedings for up to 30 days to see if the loan terms can be eased so the homeowner can afford to make payments. (more…)
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