WASHINGTON (AP) - Six major lenders 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, called Project Lifeline, is to be announced Tuesday by the Treasury Department and the Department of Housing and Urban Development, a person familiar with the plan said Monday evening, confirming earlier news reports and speaking on condition of anonymity because it had not yet been made public.
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., JPMorgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co.
All six are involved the so-called Hope Now plan, a deal 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.
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