June 17th, 2008 11:20 AM by Lehel Szucs
This story gives hope to homeowners who may be in trouble. Now let's hope that it is true and lenders will do what they say in this article...
Lenders Agree to Increase Anti-Foreclosure EffortsBy Alison Vekshin
June 16 (Bloomberg) -- Citigroup Inc., Bank of America Corp. and other leading U.S. mortgage lenders agreed to expand efforts to help borrowers avert foreclosure as the Senate prepares to weigh legislation addressing the housing crisis.
The Hope Now Alliance, a group of lenders, loan-servicing companies and counselors, agreed to contact borrowers 60 days or more late on mortgages to lay out options, including loan modification, according to a draft of the agreement obtained by Bloomberg News. The group is scheduled to announce the plan tomorrow in a conference call with reporters.
"These loss-mitigation options offer balanced mortgage solutions that are affordable payment alternatives and in the best interest of the homeowner and the investor,'' according to the agreement.
The Hope Now Alliance, formed last year at the urging of U.S. Treasury Secretary Henry Paulson, has been criticized by House Financial Services Committee Chairman Barney Frank and Federal Deposit Insurance Corp. Chairman Sheila Bair for moving too slowly in modifying loan terms for struggling borrowers.
Faith Schwartz, Hope Now's executive director, declined to comment on the agreement ahead of its release tomorrow.
Treasury officials have been meeting with Hope Now participants and considering other ways to stem foreclosures, U.S. Treasury Undersecretary Robert Steel said in a May 14 interview.
Hope Now members agreed to contact homeowners with subprime adjustable-rate mortgages that have a ``probable'' risk of default 120 days ahead of their loan resetting to a higher rate, according to the document.
They also agreed to have enough staffers on hand to manage the volume of calls and loss-mitigation requests from homeowners. They will inform homeowners whether they were approved for help within 45 days of receiving applications.
Hope Now reported on May 30 that member companies helped avert foreclosure for 183,000 homeowners in April and nearly 1.6 million since July.
To contact the reporter on this story: Alison Vekshin in Washington at firstname.lastname@example.org.