Project Lifeline

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WASHINGTON - Homeowners threatened with foreclosure would in some instances get a 30-day reprieve under an initiative the Bush administration announced Tuesday. Dubbed "Project Lifeline," the program will be available to people who have taken out all types of mortgages, not just the high-cost subprime loans that have been the focus of previous relief efforts.



The program was put together by six of the nation's largest financial institutions, which service almost 50 percent of the nation's mortgages.



These lenders say they will contact homeowners who are 90 or more days overdue on their monthly mortgage payments. The homeowners will be given the opportunity to put the foreclosure process on pause for 30 days while the lenders try to work out a way to make the mortgage more affordable to homeowners.



"Project Lifeline is a valuable response, literally a lifeline, for people on the brink of the final steps in foreclosure," Housing and Urban Development Secretary Alphonso Jackson said at a joint news conference with Treasury Secretary Henry Paulson.
 
I would have thought lenders would start doing this long ago when prices started dropping off a cliff.



In a bubble market lenders would be happy to foreclose on a house--giving the occupants no financial counseling and as few options as possible--sell it, and make a profit. Of course, this is assuming the occupants can't easily refi.
 
<a href="http://calculatedrisk.blogspot.com/2008/02/project-lifeline.html">Tanta's take on project lifeline</a>.





<em>Now, there is a Project: toss out a lifeline to those who just dipped under the waves for the third time.</em>


<em>


Highlight of the whole thing:





Q to Paulson: "Is the worst over?"





Paulson: "The worst is just beginning."





</em>But... but... I thought it was contained? I guess they gave up trying to find a container large enough for this mess.
 
<p>30 days... There's never been a better time to contact your bank! Call them now or be locked out forever!</p>
 
Atleast after 5 months they are finally admitting their is a large problem.



Regardless of project lifeline it does not solve the problem it just stalls the problem. Personally the govt needs to bow out and let the markets fix this mess. The quicker they do that the sooner we will eliminate all the excess and have prices closer to fundamental and technical levels.
 
<a href="http://www.housingwire.com/2008/02/12/commentary-on-project-lifeline-loss-mitigation-and-pr-stunts/">Paul over at housingwire</a> has a great <strike>rant</strike> commentary on it.





<em> (Speaking of which, I didn’t see any announcement from the big six in terms of staffing for this, did you? Wasn’t the entire reason for the “subprime rate freeze” program a lack of available resources needed to process loan modifications?) </em>

<p><em>Of course, any time a loss mitigation program gets announced, the first question any HW reader should be asking is “will it matter?” Every little bit helps, and I’m sure this will have some impact. But the truth of the matter is that there is really only so much impact that can ultimately be had; we face an affordability and housing leverage problem, and there is only so much that can be done to mitigate such a situation.</em></p>

<p><em>HW has reported <a href="http://www.housingwire.com/2008/01/17/fdics-bair-fix-this-mess-or-were-stepping-in/">numerous times</a> that Congressional and regulatory leaders want to see foreclosures reduced </em><em>or else, and that we’re as a nation looking at one million more foreclosures than would be considered normal — and </em><em>something must be done to prevent it. So the industry, the Treasury, HUD and others roll out another plan. </em></p>

<p><em>And there will probably be another plan after this one, at some point, not to mention some really horrible legislation from Congress to boot.</em></p>

<p><em>But something tells me that deep down, even Hammerin’ Hank and the senior execs at every major bank know what needs to happen, election year posturing on Capitol Hill or not. All referenced “avoidable foreclosures” repeatedly in their statements to the media today; not “foreclosures,” but only those that are avoidable.</em></p>

<p><em>It’s sort of like fighting gravity. The question is how to let gravity in the housing market run its course without also dragging down the larger U.S. economy with it, or knocking other countries off of their financial axes at the same time — a much more complex problem to solve than in years past, thanks to the myriad of “financial innovations” that managed to embed mortgages so deeply and directly into global financial markets. </em></p>

<p><em>I’d suspect that’s precisely the sort of tug-of-war that’s keeping Paulson from getting much sleep these days. It’s also precisely the reason so many economists are predicting a housing-led recession, one of those rare instances of the tail wagging the proverbial dog.</em></p>
 
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