Project Lifeline: Foreclosure Assistance

The Treasury Department and the Department of Housing and Urban Development will announced Project Lifeline today. Project Lifeline is a program that will allow those who have fallen behind on payments to work out a more affordable loan with their lenders, starting with six majors lenders. They would effectively suspend foreclosures for 30 days in order to work things out. The six lenders in the pilot program are Bank of America Corp, Citigroup Inc., Countrywide Financial Group, JPMorgan Chase & Co., Washington Mutual Inc., and Wells Fargo & Co.

Those six are also involved in an organized effort known as Hope Now. Hope Now seeks to freeze rates on subprime mortgages for five years to help borrowers with loans that will spike after an ARM resets. The plan seeks to help out people who have mortgages that are 90+ days late.

The group said it helped 545,000 subprime borrowers with spotty credit in the second half of last year, compared with its January estimate of 370,000. That works out to 7.7% of 7.1 million subprime loans outstanding as of September 2007.

Unfortunately, many borrowers can’t work things out even after getting a brief respite. If you think you can, trying one of these programs may give you the room you need to survive.

Source: CNN Money