Countrywide Financial Corp. and the Association of Community Organizations for Reform Now, better known as ACORN, announced a plan Monday to help distressed borrowers avoid foreclosure. The deal aims to help borrowers who are delinquent on their subprime loan payments find new, more affordable terms. The Seattle P-I reported that the program aims to help thousands of borrowers nationwide, including at least 1,000 in the Seattle area.
Meanwhile, White House officials announced "Project Lifeline," a new program to help homeowners who face imminent foreclosure. Six of the nation's largest financial institutions agreed to place a freeze on all foreclosure action for 30 days. During that time, administration officials say homeowners will have the opportunity to work out more affordable terms. Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., JPMorgan Chase & Co., Washington Mutual Inc. and Wells Fargo & Co. are participating in the program. Read NPR's report for more details.
The announcements came just days after the State Foreclosure Prevention Working Group released a report showing that 7 out of 10 borrowers who were seriously delinquent on their home loans in October were not receiving help to prevent the possibility of foreclosure. See related All Consuming blog post.
Attorney General Rob McKenna’s requested legislation to reduce foreclosure rescue scams survived today's committee cutoff. HB 2791, prime-sponsored by Rep. Patricia Lantz, D-Gig Harbor, would help reduce foreclosure rescue schemes that include an option to allow the original homeowner to buy or lease back the property from a buyer. The bill unanimously passed the House and was referred to the Senate Consumer Protection and Housing Committee.