The Project Lifeline Initiative Puts Foreclosures on Hold

The subprime mortgage crisis has many people in fear of losing their homes. Ballooning mortgage payments that typical borrowers have been unable to meet have caused defaulting like never before. With no means for making these large mortgage payments, many people who count on the security of owning their own home have been looking at foreclosure and an uncertain future.

The HOPE NOW Alliance

Cognizant of the problem, the government has partnered with major lenders to take action in order to prevent citizens from losing their homes. The HOPE NOW Alliance is a massive conglomeration of lenders and banks that have joined forces to try to find a solution to this crisis.

Project Lifeline

Treasury Secretary Henry Paulson hopes that the answer will come from Project Lifeline. Project Lifeline is a pledge by the six biggest loan servicers to put a hold on foreclosure efforts on homeowners who are over 90 days delinquent on their mortgage payments. These servicers represent over half of the mortgage lending market so many of those in danger of foreclosure will be affected.

The plan doesn’t just affect subprime borrowers. Many delinquent borrowers will have the opportunity to get their mortgage situation in order. The 30-day freeze is designed to give borrowers time to talk with their lenders and work out an arrangement that will allow them to keep their homes.

Multi-Pronged Attack on Housing Crisis

It is hoped that this plan will work in concert with the deal President Bush announced in December to freeze subprime loan mortgage rates for some borrowers for up to five years while they find a way to manage the payment jump that follows the introductory rate.

Those affected by the housing crisis should contact their lenders as soon as possible to start working out payment arrangements. Lenders do not want their borrowers to go into default and there are a number of options you and your lender can decide upon, including refinancing or changing the terms of the current loan agreement to something more manageable.