Lifeline for homeowners in default
Date Published: March 2008
Financial Facts
On Feb. 12, Treasury Secretary Henry Paulson and HUD Secretary Alphonso Jackson held a news conference to announce Project Lifeline.
This is a new program that was brokered with the HOPE NOW alliance to help prevent avoidable foreclosures and continue to look for additional solutions to reach and help homeowners.
Project Lifeline is a targeted outreach to seriously delinquent homeowners (90 days or more) who currently face the greatest risk of losing their homes. It's an effort to directly pause the foreclosure process, where appropriate, through a single call.
Currently there are six HOPE NOW alliance members, representing 50 percent of mortgages nationwide, who are leading the charge: Bank of America, Chase, Citigroup, Countrywide, Washington Mutual and Wells Fargo. Other lenders are also being encouraged to join Project Lifeline.
These lenders will begin the program by providing a letter to seriously delinquent homeowners giving them a simple step-by-step approach that may enable them to pause their foreclosure for 30 days while a potential loan modification is evaluated. Sub prime, Alt-A and prime loans may qualify for this program, including second liens and home equity loans.
The steps to be followed after receiving the letter from your lender are:
Step 2: Tell the servicer you have received the letter, you want to stay in your home and you are willing to seek counseling, if necessary.
Step 3: Provide updated financial information so the servicer can explore an appropriate solution.
Step 4: If applicable, homeowners already in the foreclosure process will have the process paused for up to 30 days during this review period until a formal decision is made and, if possible, a plan is created.
Step 5: If a workout plan is established and the homeowner follows the plan for three consecutive months, their loan will be formally modified as they will have demonstrated their ability to meet the requirements.
Qualifying Loans:
All 90-day delinquent loans, including sub-prime, Alt-A, prime, second liens and home equity loans that ARE NOT:
n In active bankruptcy
n In active foreclosure with sale date less than 30 days
n Where the homeowners had indicated that they want to give up the home
n Investment properties
n Vacant properties
It should be noted that this program is different than previously announced programs because not only does it cover sub-prime borrowers, but it also includes Alt-A, prime loans, home equity loans and second mortgages. This program could potentially have a significant impact as there are hundreds of thousands of homeowners who are at least 90 days delinquent.
To get more information and see a sample letter, contact (888) 995-HOPE or www.fsround.org/hope_now/pdfs/February12-ProjectLife-lineOverview.pdf.
This is a new program that was brokered with the HOPE NOW alliance to help prevent avoidable foreclosures and continue to look for additional solutions to reach and help homeowners.
Project Lifeline is a targeted outreach to seriously delinquent homeowners (90 days or more) who currently face the greatest risk of losing their homes. It's an effort to directly pause the foreclosure process, where appropriate, through a single call.
Currently there are six HOPE NOW alliance members, representing 50 percent of mortgages nationwide, who are leading the charge: Bank of America, Chase, Citigroup, Countrywide, Washington Mutual and Wells Fargo. Other lenders are also being encouraged to join Project Lifeline.
These lenders will begin the program by providing a letter to seriously delinquent homeowners giving them a simple step-by-step approach that may enable them to pause their foreclosure for 30 days while a potential loan modification is evaluated. Sub prime, Alt-A and prime loans may qualify for this program, including second liens and home equity loans.
The steps to be followed after receiving the letter from your lender are:
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Step 1: Call your mortgage servicer within 10 days of receiving the notice.Step 2: Tell the servicer you have received the letter, you want to stay in your home and you are willing to seek counseling, if necessary.
Step 3: Provide updated financial information so the servicer can explore an appropriate solution.
Step 4: If applicable, homeowners already in the foreclosure process will have the process paused for up to 30 days during this review period until a formal decision is made and, if possible, a plan is created.
Step 5: If a workout plan is established and the homeowner follows the plan for three consecutive months, their loan will be formally modified as they will have demonstrated their ability to meet the requirements.
Qualifying Loans:
All 90-day delinquent loans, including sub-prime, Alt-A, prime, second liens and home equity loans that ARE NOT:
n In active bankruptcy
n In active foreclosure with sale date less than 30 days
n Where the homeowners had indicated that they want to give up the home
n Investment properties
n Vacant properties
It should be noted that this program is different than previously announced programs because not only does it cover sub-prime borrowers, but it also includes Alt-A, prime loans, home equity loans and second mortgages. This program could potentially have a significant impact as there are hundreds of thousands of homeowners who are at least 90 days delinquent.
To get more information and see a sample letter, contact (888) 995-HOPE or www.fsround.org/hope_now/pdfs/February12-ProjectLife-lineOverview.pdf.
Mike Ferguson is the owner of Windsor Financial Services located in Granite Bay. His Web site address is www.windsorfinancial.net.
