Bush To Put 30-Day Freeze On Foreclosures

(CBS/AP)  The Bush administration, trying to deal with a worsening housing slump, announced a new initiative Tuesday aimed at helping homeowners about to lose their homes. For qualified homeowners, it will put the foreclosure process on hold for 30 days.

Dubbed "Project Lifeline," the new 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 on 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. They 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 the homeowner.

"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.

He said the goal was to provide a temporary pause in the foreclosure process "long enough to find a way out" by allowing homeowners and lenders to negotiate a more affordable mortgage.

Paulson said that the new effort was just one of a number of approaches the administration was pursuing with the mortgage industry to deal with the country's worst housing slump in more than two decades.

It's really about protecting borrowers, it's about protecting neighborhoods. And it's also about protecting the housing market and the economy, ultimately," Sheila Bair, chairman of the FDIC, told CBS News.

In December, President Bush announced a deal brokered with the mortgage industry that will freeze certain subprime loans, those offered to borrowers with weak credit histories, for five years if the borrowers are unable to afford the higher monthly payments as those mortgages reset after being at lower introductory rates.

"As our economy works through this difficult period, we will look for additional opportunities to try to avoid preventable foreclosures," Paulson said. "However, none of these efforts are a silver bullet that will undo the excesses of the past years, nor are they designed to bail out real estate speculators or those who committed fraud during the mortgage process."

All six lending companies are currently involved in Hope Now, a Bush administration-organized effort to freeze rates on some high-cost subprime mortgages for five years to aid borrowers whose teaser rates are jumping sharply higher. Since then, Paulson has urged lenders to expand that effort to cover struggling homeowners with conventional mortgages.

The Hope Now alliance, which includes lenders, investors and nonprofit groups, said last week that it helped nearly 8 percent of subprime borrowers in the second half of 2007 - more than its original estimate.

The group said it helped 545,000 subprime borrowers with spotty credit in the second half of last year, compared with its January estimate of 370,000. That works out to 7.7 percent of 7.1 million subprime loans outstanding as of September 2007.

[ianlou]

Washington hates when the middle class gets uppity and starts to torpedo the status quo.
Massive complaints about the diminishing standard of live from most Americans mean nothing until the string pullers start loosing money.

[grammawhamma]

I agree that the economy is in a big mess. Sending $600 to each taxpayer and telling them to spend it isn''t going to help. A thirty day freeze on forclosures won''t help. I don''t know what the solution is but I do think I know what caused part of the problem.

I see people today mostly living above their means. Did they ever hear of buying a "starter home" (a small but liveable "affordable" home)? Did they ever hear of buying a used car or even a new small economy car? Can they shop without using a credit card to buy things they think they need but don''t have the cash for?

Low income people have problems putting food on the table and gas in their old clunker cars to go to a minimum wage job. Those who are crying now that their $300,000 home is only worth $250,000 now have no sympathy from me!

[tibu987]

I guarantee that we will see many more of Bushes "too late" fixes as his miserable term of eight years comes to an end. This is the simplistic Bush way to make amends for what may go down in history as the the most out of touch, most poorly managed administration in America''s history.
I also expect that many more rats will be leaving this sinking ship in the next few months, trying to salvage their reputations.
Sorry guys and gals, it is too late.

[mcvet]

All you peeps defending this idiotic decision are probably the ignorant saps who have or have had mortgages way above your means...If anyone can''''t afford to live in the house they all on their own decided to purchase, then they should lose it...Period...End of story...Don''''t rely on the government to spoon feed you...


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Posted by DylanXXV at 05:15 PM : Feb 12, 2008
+ report abuse

I sit and read what these Nazi''s post and scratch my head. How can ANYONE live in this great nation and be so selfish and so without compassion. People were bombarded day after day with deal after deal from these financial company''s. They were sold a lot of hot air and now find it''s not possible to do what they lenders told them they could. What has happened to the America of My father? What has happened to the America of my Youth when people felt it was a duty to help those who stumbled? To help those in a bind? If we continue our march into fascism, I''m afraid, we are through as a nation. Sieg Heil Bush!

[observantx]

What a limp and ineffectual response to the market conditions that are gnawing away at our economy.

I thought the insipid rebate plan was a nonstarter, but this is DOA.

I guess we need to slather these problems in crude oil, before they''ll get any real attention. The pungent smell of sweet light crude. THAT gets little Georgie''s gnat sized attention span working overtime.

[culturechang]

This just prolongs the inevitable. So they wait 30 days and a flood of foreclosures will go through.

All the rate cuts did not stop the stock market from dropping 300 points in one day.

Bush is using all his authority as President to keep the Republicans in good favor for the election.

[iphyt4u]

the banks and mortgage lenders are crooks. the bush administration will do everything they can to help these crooks. worst president ever. oh, by the way, we as americans spent 500 million dollars in iraq today. it''s the same amount we''ve spent everyday...for the last 5 years.

[singingrick]

The Bush Budget Deficit Death Spiral


Lenders talk about a %u201Cdebtor%u2019s death spiral.%u201D It occurs when borrowers get so far in over their heads they begin borrowing money just to cover the interest payments on past borrowings. The borrowers have to do this to keep the lending flowing but they can no longer plausibly pay down the principal. As new debt compounds on old, bankruptcy becomes imminent. Further lending is foolhardy. Foreclosure is only a matter of time.

The U.S. is starting to look like it is entering just such a death spiral. It is foretold not simply by the large and growing deficits, nor by the fact that their carrying costs will rise quickly as interest rates rise. Rather, it is the fact that these trends are becoming irreversible, a structural part of the U.S. economy.

[hsinco-2009]

Those of us that played by the "old" rules should feel little sympathy for those that decided to play by the "new" rules.

And those lenders that made the loans on the "new" rules should suffer their losses without a taxpayer bailout, which I am sure Bu$h is planning to his cronies.

Does Savings and Loan debacle in the 1980''s remind you of anything?

BTW- John McCain was involved with Charles Keating and was one of the Keating 7. Thief!!!!

[linfinster]

We balk at Government intrusion, but have lost so much of our basic dreams of personal freedom (to live in peace and quiet, self sustaining, healthy, bliss .. as an example) when the wealthy and the greedy have manipulated our "rights as humans" laws and regulations by making us question what is worth losing a right over or think that we are losing a right to do something, .. just to make more money. Our politicians are wealthy w/***** and we''re left without much more than the basic, generic life!