Tuesday, February 12, 2008

"Project Lifeline" Lenders New Plan to Reduce Foreclosures

The US Treasury department announced a plan known as "Project Lifeline" designed to help give distressed homeowners more time to work out payment plans and prevent foreclosure. Bank of America, Citigroup, Countrywide Financial, JPMorgan Chase, Washington Mutual and Wells Fargo have agreed to allow delinquent homeowners facing foreclosure a 30 day period to work out new payment terms. During this period, the banks will attempt to contact the distressed borrowers, and will "freeze" the foreclosure process while they attempt to find a repayment solution.  Borrowers with both fixed and option arm loans for primary residences may qualify for Project Lifeline. 

Many economic experts are  skeptical that Project Lifeline will actually make much of a difference. Distressed homeowners are only eligible for this program after they've missed three mortgage payments. This is the time that most lenders issue the Notice of Default.

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2 comments:

Alan Barker said...
This comment has been removed by the author.
Alan Barker said...

It's good to see that the government is trying to do something to reduce bank owned and reo homes.