Housing Advocates and Mortgage Brokers, Praise Project Lifeline

Posted on February 15th, 2008 by saman

Homeowners threatened with foreclosure may get a 30 day reprieve a Tuesday announcement that major lenders were allowing certain homeowners. They had been threatened with foreclosure of the reprieve as announced by the Bush administration. In response housing advocates and mortgage brokers have praised the Bush administration.

The program, will cover individuals who had taken out various types of mortgages, and not be restricted to those individuals who had taken out the high cost subprime mortgages which have been the prime culprit in the recent mortgage housing meltdown. The project is being given the nickname “Project Lifeline.” Eddie Latimer seems to believe this will help slow down the disaster. Mr. Latimer, who is Nashville\’s affordable housing resource chief executive officer, went on to say that middle income homeowners are increasingly threatened with foreclosure.

This whole thing is spilling over into the rest of the market. It\’s expected that around 22 000 Tennessee homeowners who currently have adjustable-rate mortgages will see those rates readjusted this year. It\’s expected that the majority of those will see their rates increased, which has the potential to limit their ability to repay their mortgage. Citigroup Inc., Countrywide Financial Corp., Washington Mutual in Inc., Wells Fargo & Co., J.P. Morgan Chase & Co. along with Bank of America all pulled together to make this federal program happen. The group of six banks, who participated in a federal program control approximately 50% of all US mortgages.

What\’s in Store Individuals, whose mortgages are 90 days or more will be contacted by the lenders, it is the lenders intent, to give these individuals an opportunity to pause for a 30 day the foreclosure proceedings. During the 30 day period lenders and borrowers can to try to work out a detail or plan that would allow the individual affordable mortgage payments. Keith Payne, a senior loan officer of for a well-established Nashville brokerage firm says the “catch” is in the details. He goes on to say it\’s unsure or unclear just how many homeowners will or may be helped by this plan. Is 30 Days Really Enough? With the slowed economy and rising fears of a full-blown recession

Democrats continue to criticize the Bush administration for doing too little to ease fears. Hillary Rodham Clinton was quoted in a statement saying that she had called for a moratorium on subprime closures with a 90 day grace period, last year. Ms. Clinton, who is also running in the Democratic presidential nomination race went on to say the Bush administration reactions have been slow in coming. Mr. Christopher Dodd, D-Conn. and chairman of the Senate Banking Committee criticized the Bush administration and financial industry, saying that they were falling behind in an attempt to deal with the current crisis. He goes on to say that the plan, although heading in the right direction, by no means is a measure capable of holding back the mass of foreclosures that this country is facing in the next few months.