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.

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