As the mortgage crisis continues its downward trend and spread of subprime home loans for all categories, the government has just launched its newest utility. But it is a good deal for homeowners or only a small association, a gushing wound stem cells?
This new program, called Project Lifeline is help for all borrowers, not just homeowners stuck in high-rate subprime loans. It provides long overdue homeowners to suspend foreclosures for 30 days while lenders try to todevelop affordable loan programs for them.
The new plan applies to "serious offenders" homeowners whose mortgages are 90 days or more overdue. According to the Mortgage Bankers Association, this amounts to over 1.3 million home loans at the end of the third quarter of last year.
Lifeline Project consists of the 6 largest companies in the mortgage market industry, including Wells Fargo, Washington Mutual, Citigroup, Bank of America, JP Morgan Chase and CountrywideFinancial.
All six of these companies are already participating in Hope Now, a program to assist homeowners with high-cost subprime mortgages by freezing their adjustable "teaser" rate for five years. Hope Now has been a key component of the plan of the Bush administration's worry about helping homeowners, the foreclosure storm.
"Project Lifeline is a valuable response, literally a lifeline for people on the edge of the final steps of foreclosure," said Minister of Housing andUrban Development Alphonso Jackson.
That sounds pretty good, but it is really true? Project Lifeline is sufficiently broad to much-needed help for homeowners trying to keep afloat offer? And who are they buying more time for anyway - homeowners or the banks?
Only time will tell. Any mortgage term modifications or repayment plans are purely discretionary so that the banks still hold all the cards. If these lenders are not aggressive enough in offering affordable long-term solutionsProgram to fail. And even with improved credit conditions, there is always the problem of falling house prices in many areas of the country, some homeowners will leave for more than worth their homeland. At what point it makes more sense to go away?
Many consumers are convinced that both Hope Now and Project Lifeline in short, because the solutions offered are covered only short term. For many homeowners this delay short-term loans and repayment plans, changes onlyinevitable. The best solution has stressed borrowers refinance at lower fixed rates conditions, the lenders are just very reluctant to do.
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