Announced yesterday (Feb 11, 2008), “Project Lifeline” is yet another attempt by both the Bush Administration and six of the nation’s top mortgage lenders to “lend a helping hand” to the American Homeowner. The first wave of government intervention into the troubled real estate market was just a few weeks ago and apparently, they figured out the same thing that we already knew. It helps .5% of the homeowners in the country, while the others sit around wondering what to do.
Enter round two. Where the first round of government intervention focused its attention on the subprime market, Project Lifeline offers help this time to homeowners with Conventional Mortgages, Home Equity Loans, and Second Mortgages. Great! So how does it work?
Well, they (the Bush Administration) have gotten together and “persuaded” the big six (Bank of America, Countrywide, Citibank, Wells Fargo, Washington Mutual, and J.P. Morgan Chase) to voluntarily contact borrowers that are currently over 90 days past due and potentially offer to extend their foreclosure proceedings by another 30 days to give homeowners time to work something out to avoid foreclosure. That’s great, right?
Ok, first of all, for those of you who are not familiar with the mortgage industry, let me just come out and say it; you can quote me on this “there is absolutely no mortgage company on the planet that will refinance your loan when you are currently over 90 days past due, and there is no equity in the home”. You can take my word for it, or you can call the first 30 companies listed in the phone book. Some will tell you that they may be able to do something, when they know that they can’t because mortgage loan officers are so thirsty they will take your application and hope and pray that some miraculous loan program pops up that will save the day. In my 11 years in the business, there has never been a loan program that would allow for a 100% refinance when you are currently 90 days past due. And, the ones that came anywhere close to that are no longer in business (reference mortgage meltdown 2007).
The long and the short of it is whether this was meant to extend an olive branch, or it was just for some public relations, the fact remains that if you can’t afford your house, you will have to sell it, or risk having it taken. It stinks, and a lot of people are hurting over that reality, but it is the reality.
Steve Russell is the Co-Founder of REO In Motion, LLC. (a Florida based internet marketing firm), and a contributing editor for [http://www.preforeclosurefsbo.com] His background consists of over 10 years in the retail and wholesale mortgage industry.