“Project Lifeline” was announced by the Treasury Department today.
Six major lenders are offering to delay some foreclosures for 30 days to try to work out a more affordable mortgage for those delinquent on their mortgage payments for more than 90 days.
The lenders participating are:
Bank of America
Citigroup
Countrywide Financial
JP Morgan Chase
Washington Mutual
Wells Fargo
Collectively, these lenders service almost 50% of the nations mortgages.
According to the Treasury Department release, this program is:
. . .a targeted outreach to homeowners’ 90-days or more delinquent that may lead to a “pause” in the foreclosure process. This is an important new initiative, targeted to reach not only subprime borrowers, but all 90-day delinquent homeowners nationwide with a step-by-step approach to find individual solutions to individual problems.
Note this isn’t a law and these (and other) financial institutions are not obligated to work with any delinquent borrower.
If you think you may benefit from this program, you should contact your lender.
More:
Treasury Secretary Henry Paulson’s Statement on Project Lifeline
Wall Street Journal
New York Times
CNN Money
.
Technorati Tags: Project Lifeline, foreclosure, foreclosure delay freeze
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{ 5 comments… read them below or add one }
That is a step in the right direction if the homeowners have the financial means to stay in their homes and if they will answer their phones and mail. I do some loan mitigation work for a few of the above mentioned lenders, and I can testify that many people go into hiding from all creditors and will never learn of the available help. Additionally, lenders are missing opportunities to help those who proactively want it.
Is 30 days really going to make a difference to most of these people?
Only if they have the financial means to stay in their house. It doesn’t do any good to offer someone a lower mortgage payment when they lost their job or their source of income. But I have worked with people who got behind 3-4 months and just needed a way to catch up and start over. A loan modification can be very helpful to these people. The thing is: if they are proactive and talk to their mortgage company in the first place (rather than avoiding calls and mail), they shouldn’t need an extra 30-days. It takes 6-months for their home to be sold at the public auction. An extra 30-days will only help someone who just recently got another job (after 5.5 months unemployment, let’s say) and needs to prove income.
What about if you have already had a loan modification 2 years ago, and according to your lender they only allow 1 per life of the loan. What other options are available if your mortgage is 90 days late.
Torey - This is a brand new (though voluntary) program. It’s possible your lender may have different rules for it.
I think the first thing anyone should do that is behind in their payments (actually, before you get behind) is contact your lender. With their steadily climbing inventories of foreclosed homes, they may consider something today that they didn’t yesterday.
If they won’t budge, you don’t really have a whole lot of options. They pretty much boil down to sell, foreclosure, or hand over the deed. But contact your lender. Soon.
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