February 20th, 2008 12:32 PM by Lehel Szucs
The Bush Administration announced "Project Lifeline" last week, a new initiative to help struggling homeowners with all types of mortgages, not just subprime or adjustable-rate mortgages.
Part of the Hope Now Alliance (1-888-995-HOPE), launched late last year, the new Project Lifeline outreach program would grant homeowners who are at least 90 days late a 30-day break from the foreclosure process while their lenders try and work out a more affordable solution, including restructuring the loan, freezing or even lowering interest rates.
The program was put together by HUD, the Department of Treasury, and six of the largest financial institutions, including Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., J.P. Morgan Chase and Co., Washington Mutual Inc., and Wells Fargo & Co. These banks, which collectively service more than 50% of mortgages in America, have agreed to this program as a means to lessen the anticipated impact foreclosures could have on the open market.
The objective with Project Lifeline, said Larry Di Rita, spokesperson for Bank of America, is to offer a "range of remedies to keep people in their homes."
Not everyone is as hopeful as Di Rita, however. Bruce Marks, CEO of the Neighborhood Assistance Corporation of America (NACA), a non-profit, community advocacy and homeownership organization, called the Lifeline program a "public relations gimmick with no substance."
The Hope Now Alliance, which includes 25 loan servicers, reportedly helped 545,000 subprime borrowers and 324,000 prime borrowers in the second half of 2007, according to CNN. No estimates on how many homeowners this new program will help have been announced thus far.