Project Lifeline Will Help Prime And Nonprime At-Risk Consumers
Secretary of Treasury Henry Paulson announced Project Lifeline on Feb. 12, an initiative created in partnership with Wells Fargo and our other HOPE members Countrywide, CitiMortgage, Chase Home Finance, Washington Mutual and Bank of America.
Through this program, mortgage servicers will send letters to seriously delinquent homeowners (90+ days late) with an opportunity to seek a “pause” of up to 30 days in their fore- closure, where appropriate, if borrowers call and indicate a desire to keep their homes. Getting consumers to contact their lender remains the single biggest obstacle in providing fore- closure prevention solutions. Project Lifeline focuses on out- reach to both prime and nonprime consumers.
While no single solution will help all at-risk consumers, the combination of Fast-track solutions (for subprime ARM reset customers); increases to Fannie Mae, Freddie Mac and FHA lending limits; FHA Modernization; the economic stimulus package; and case-by-case solutions that lenders discuss with at-risk consumers are all expected to contribute to a reversal of the current rising foreclosure trend.
Options would include a workout, in which the borrower pays extra each month and catches up on the late payments over time, or a modification, in which the rate or terms of the loan are changed. In rare cases, a modification could even include some debt forgiveness if the borrower owes more than the house is worth.
Although this is just a small and slight step towards avoiding foreclosure, Project Lifeline is another way that Wells Fargo and HOPE NOW are developing solutions to help homeowners. It is critical that we do everything we can to reach out to these homeowners one more time. Avoiding foreclosures is in the best interest of our customers, our company and our economy.