Alert February 12, 2008

Treasury Department Announces New Foreclosure Prevention Initiative

Today, Treasury Secretary Henry M. Paulson, Jr. announced a new private sector-led initiative, dubbed “Project Lifeline,” which is aimed at helping mitigate additional foreclosure activity. Six of the largest mortgage loan servicers — Bank of America, Citigroup, Countrywide, JPMorgan Chase, Washington Mutual and Wells Fargo — announced their participation in Project Lifeline. The program calls for a 30-day freeze option on some foreclosures, workout plans and loan modifications if workout plans are followed for 3 consecutive months. Project Lifeline will apply to all loan types, including prime, subprime and Alt-A mortgages, as well as home-equity and second-lien loans. Click here for the Treasury Secretary’s statement on Project Lifeline and here for more details on the announcement.