Due to recent economic hardship, delinquent mortgages and foreclosures have been rising at a staggering pace. Being evicted is one of the last things any homeowner wants to do but little do they know, foreclosure is also a worst case scenario for the bank as well. As a result, banks will engage in loss mitigation. One step to loss mitigation involves the bank continually calling and sending letters before opting for foreclosing on a property. Sadly, a lot of troubled homeowners will ignore all of the banks attempts at communication. When a homeowner is faced with this situation ignorance is far from bliss, often time banks are willing to work out a deal and meet their clients half way.
Bridging the Communication Gap
Six of the largest lending house in America (Wells Fargo, Countrywide, CitiMortgage, Washington Mutual, Chase Home Finance and Bank of America.) have come together with hopes to improve the current housing crisis. The plan they have come up with is called “Project Lifeline”. Project Lifeline reaches out to homeowners with mortgage payments that are ninety days past due, or more, and give them an addition thirty days to come up with their missed payments or workout a modified payment plan with their lender.
How Project Lifeline can help
The initiative of this project is to notify overdue borrowers about extending the looming prospect of a possible foreclosure. This promise is only upheld if the borrower:
- Calls within ten days of receiving the notification,
- Expresses that they wish to keep the house and avoid foreclosure,
- Provides the lending bank with detailed financial information and
- Attends financial counseling if the lender deems it necessary.
After these basic requirements are met the parties have a few weeks to reach an agreement. This agreement usually includes catching up on their overdue payments and/or modifying the loan to meet these new needs. Debt forgiveness is a rare but viable option for borrowers whose homes have depreciated since purchasing.
Long Term Loss Litigation Problems
By no means is Project Lifeline a cure the the housing epidemic. The thirty day extension given by this initiative is likely to not be enough time for the borrows to resolve their financial problems and come to an agreement but if Project Lifeline can help even one family keep their home that will be one less family evicted.
Getting Help
If you are facing your own mortgage crisis, your attorney can assist you in consulting with the bank about any and all options that may be available to you. By having your attorney involved in the process, he can help you to understand and take advantage of any loss mitigation efforts the bank is likely to extend.
