Six major lenders have agreed to widen their efforts to help borrowers of all loans – not just subprime – and allow seriously overdue homeowners to suspend foreclosures for 30 days while affordable loans are worked out.  The plan, Project Lifeline, has been announced by the Treasury Department and the Dept. of Housing & Urban Development.  On a pilot basis, the plan will initially involve six of the largest mortgage lenders, in hopes that more lenders will sign on.  The participants are Bank of America Corp., Citigroup, Inc., Countrywide Financial corp., JP Morgan Chase  Co., Washington Mutual, inc. and Wells Fargo & Co.  All six are involved in a deal that the Bush administration brokered late last year with the mortgage industry to freeze rates on some high-cost subprime mortgages for five years to aid borrowers whose introductory “teaser” rates are jumping sharply higher.  Since then, Treasury Secretary Henry Paulson has urged lenders to expand that effort to cover struggling homeowners with conventional mortgages.The new plan applies to seriously delinquent homeowners, those whose mortgages are 90 days or more past due.It is not clear whether a separate announcement from Countrywide is part of the same effort.  It’s latest initiative, brokered with the Association of Community Organizations for Reform now calls for Countrywide to try to manage payment plans for borrowers that are already behind in payments, regardless of which type of subprime loan they have.

I clearly have an answer that would work … Do You Want To Hear It???  Do You Thing The Feds Would Listen To Me?!?!?!

If the Feds would only reduce the indices, (plural for index) across the board, which affect Adjustable Rate Mortgages, also know as ARM loans, this would solve the problem at hand.  ARM loans are comprised of an Index (ie: Libor, COFI, 1 Yr Treasury, MTA, CODI, COSI, etc.) plus a margin (the profit the bank earns) together this totals the current rate.  With ongoing and rising Indices, this sharp rise in interest rates will continue to increase.  Borrowers with ARM loans would be back to an affordable payment, if only the indices would decrease.  An affordable house payment sets a pattern of consistent and timely payments.  If we can afford our mortgage once again, we would also have more disposable income available.  More money circulated into the economy is a very good thing and equates to more spending and more jobs. 

I don’t get it … this is such a simple concept to incorporate, a no-brainer you could say. Why does our legal and banking system allow so much devastation to take place with the past and present foreclosure process?  Why does this process have to be so complicated, costly, devastating.  It seems that the system in place is not working and unfair to those losing their homes, not to mention the deterioration of the U.S. economy and job market? I just don’t get it … ???  Do you? Some information obtained from The Californian – Tuesday, 2/12/08