US, banks unveil aid for homeowners facing foreclosure

WASHINGTON, Feb 12, 2008 (AFP) – US Treasury Secretary Henry Paulson on Tuesday unveiled a new private sector-led program backed by six leading home lenders to help homeowners facing foreclosure in a deepening real-estate slump to keep their homes.

The plan would allow borrowers at immediate risk of losing their homes an opportunity to pause the proceedings to work out payments or refinancing.
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It was the latest effort by President George W. Bush’s administration amid the housing-market crisis to help limit the number of foreclosures, which could have a knock-on economic impact.

The new program, dubbed Project Lifeline, provides loan modification or refinancing and is aimed at “those facing the greatest immediate risk of losing their homes,” Paulson said at a news conference.

Paulson said the targeted outreach would apply to all homeowners 90 days or more delinquent on their mortgages, not just holders of subprime, or high-risk, mortgages at the center of the credit crunch unleashed last August.

Project Lifeline was developed by six members of the Hope Now Alliance, a mortgage-sector initiative launched four months ago at the encouragement of the Bush administration to aid homeowners battered by a collapse in housing prices and ti