As the housing prices gradually decline in the Los Angeles area, foreclosure and bankruptcy attorneys in the Los Angeles area have been inundated with inquiries by consumers desperate to save their homes.
Los Angeles Times is reporting that to help homeowners, six of the largest U.S. mortgage lenders, including Los Angeles based Countrywide, announced today they will halt the foreclosure process while they try to work out a new payment scheme with the delinquent borrowers. This new plan is dubbed “Project Lifeline,” and set to identify borrowers more than 60 days delinquent and stall any foreclosure proceedings by much as 30 days while new loan terms may be negotiated.
This “new” plan is not really new. Most banks have been extending additional grace period beyond the statutory foreclosure timelines to accommodate delinquent home owners. In this market, most banks do not want to foreclose on the homeowner. If you can show any reasonable cause or provide a plan which can demonstrate your ability to catch up on your arrears, most lenders have been holding off the foreclosure process in some cases as much as 6 months.
The real plan to stave off home foreclosures must involve lowering the interest rates and providing homeowners with a traditional 30 year loan. All these save the “American Dream” plans I’ve seen are gimmicky at best…its like trying to fix a broken dam with playdoh.