Six of the US's biggest banks have announced a plan to help homeowners struggling with their mortgage payments.
Bank of America, Citigroup, Countrywide Financial, JP Morgan Chase, Washington Mutual and Wells Fargo have launched ‘Project Lifeline’ to help reduce losses from the sub-prime fallout and consequent credit crunch.
As part of the plan, homeowners will have 30 days to renegotiate their mortgage payments with their lender, with the aim of reducing the number of repossessions.
The banks have already participated in ‘Hope Now’, a project to help sub-prime borrowers who are struggling with higher mortgage payments.
The new initiative is the first aimed at prime borrowers who are 90 days or more in arrears.
Floyd Robinson, president of consumer real estate and insurance services group at Bank of America, says: “Bank of America strongly supports this private enterprise initiative to build upon the efforts of HOPE NOW's previous success in preventing foreclosures.
“We want homeowners facing foreclosure to take the urgently required first step and reach out to their servicer, or housing counselor, and get started on a recovery plan.”
It is hoped the plan will help borrowers keep their homes and prevent further deterioration of the US housing market, which can be adversely affected by forced sales.
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