The Bush administration Tuesday announced a plan to help struggling homeowners avoid losing their homes to foreclosure.
Treasury Secretary Henry Paulson on Tuesday announces new help for homeowners facing foreclosure.
The program would let qualified homeowners who are at least 90 days late on their mortgage payments pause the foreclosure process for 30 days.
During the extra time provided by the program -- called Project Lifeline -- lenders and borrowers would try to work out more affordable terms, said Secretary of the Treasury Henry Paulson.
"Project Lifeline is aimed at homeowners who face a real risk of losing their home and have not yet addressed the problem," he told reporters. "Perhaps they are hoping to find a way to get current on their mortgage payments, or perhaps they don't think any solution is possible. For whatever reason, they have not yet taken action. Our hope is that today's announcement will reach them, and they will reach out immediately for help."
"Project Lifeline is a valuable response, literally a lifeline, for the people on the brink of the final steps of foreclosure," said Secretary of Housing and Urban Development Alphonso Jackson.
The plan, described as a targeted outreach to the homeowners most at risk of losing their homes, initially will involve six of the largest mortgage lenders -- Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co.
A Bank of America official spoke on behalf of the six lenders at Tuesday's news conference.
"Achieving contact with homeowners to present available options is the biggest obstacle we face in avoiding preventable foreclosure," said Bank of America's Floyd Robinson.
Robinson urged homeowners contacted by their lenders to respond quickly and be ready to work toward a solution. "Homeowners can only take advantage of this program by taking action," he said.
Paulson emphasized that Project Lifeline was intended to help with all types of mortgages, not just the subprime loans that have been the focus of attention in the current troubled housing market.
The plan builds on progress begun by the administration's Hope Now Alliance, which includes lenders, investors and nonprofits.
Hope Now was announced late last year and involves freezing the interest rates of borrowers with adjustable rate mortgages.
The program announced last week it had helped about 545,000 subprime borrowers and 324,000 prime borrowers in the second half of 2007.
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