Big Mortgage Lenders To Pause Foreclosures

by MB on February 12, 2008

Six of the largest US mortgage companies – representing about 50% of the current mortgae market – announced a plan today to suspend foreclosure proceedings on mortgages that are greater than 90 days past due. 

This pause would allow time to attempt renegotiation of mortgage terms.  The plan would include home equity loans and secondary mortgages in addition to traditional first mortgages. 

The six lenders participating in the plan are: Bank of America, JPMorgan Chase, Citigroup, Countrywide Financial, Washington Mutual and Wells Fargo.

The plan will be called "Project Lifeline".

The banks reached this deal as the US housing market – particularly he portion financed with adjustable rate subprime mortgages – continues to deteriorate.  According to data from The Federal Reserve, about 1.5 million subprime mortgages are scheduled to reset to a higher interest rate this year.  An additional 500,000 will reset in 2009.

Homeowners already in foreclosure, or within 30 days of a foreclosure sale are not eligible for the plan.

Also, vacant homes and investment properties will not be eligible.

Source:

Banks to pause delinquent mortgage foreclosures

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