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US homeowners 'to get extra help' US banks join mortgage help plan
(about 7 hours later)
Six major US banks are expected to announce plans to offer more help to homeowners struggling with mortgages. Six major US banks are taking part in an initiative to help homeowners struggling to pay their mortgages.
Bank of America, Citigroup, Countrywide Financial, JP Morgan Chase, Washington Mutual and Wells Fargo are reported to be taking part in "Project Lifeline". Bank of America, Citigroup, Countrywide Financial, JP Morgan Chase, Washington Mutual and Wells Fargo are those taking part in "Project Lifeline".
The plan is expected to be announced on Tuesday by the US Treasury Department and Housing Department. Backed by the US Treasury Department and Housing Department, people failing to pay their mortgages will have the foreclosure process halted for 30 days.
Under the plan homeowners will be given 30 days extra to renegotiate their mortgage payments. It is hoped that more affordable payments can then be negotiated.
Project Lifeline 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
The six banks are already involved in a government programme called "Hope Now". Project Lifeline extends the current assistance available to holders of sub-prime mortgages to those with all forms of home loans.
It helps those that took out sub-prime mortgages and are now facing a dramatic increase in payments. It will be available to those homeowners whose mortgage payments are 90 days or more late.
The banks say they helped 545,000 sub-prime borrowers in the last six months of 2007. "Project Lifeline is a valuable response, literally a lifeline, for people on the brink of the final steps in foreclosure," said Housing and Urban Development Secretary Alphonso Jackson.
"Project Lifeline" is set to extend help to homeowners who have conventional mortgages but whose mortgage payments are 90 days or more late. He added that the aim was to provide a temporary pause in the foreclosure process "long enough to find a way out" by allowing homeowners and lenders to negotiate more affordable mortgage payments.
Many homeowners with good credit borrowed against the value of their houses, but with home prices falling fast, some owe more than their home is worth. The current sub-prime assistance plan is called "Hope Now".
The banks say this has helped 545,000 sub-prime borrowers in the last six months of 2007.