Help may be on the way for homeowners at the brink of foreclosure. Government leaders announced today a new program that would let qualifying homeowners forestall foreclosure proceedings for 30 days.
The program, called Project Lifeline, is targeted at homeowners -- including those with traditional and adjustable-rate home loans -- whose mortgage payments are 90 days or more past due.
Treasury Secretary Henry Paulson said that the program would provide a "step-by-step approach to find individual solutions to individual problems."
Paulson acknowledged that the program would not help everyone.
"Of course, there will be homeowners who will still take no action and some will simply walk away from their mortgages particularly those borrowers who put little or no money down and whose mortgage exceeds their home value," he said. "No program can bring every struggling homeowner into the counseling and evaluation process and we cannot help those who choose not to honor their obligations."
Last week, the State Foreclosure Prevention Working Group, an organization of state attorneys general and banking departments, said that seven of 10 seriously delinquent borrowers aren't getting the help they need.
Initially only six mortgage lenders will be participating in Project Lifeline, but officials hope other banks will be able to follow. The participating banks are JPMorgan Chase, Wells Fargo & Co., Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., and Washington Mutual Inc. The six banks account for 50 percent of the mortgage market.
The lenders are all members of Hope Now, a White House-backed effort by the private sector to put at-risk homeowners in touch with lenders to work out solutions to their mortgage woes.
Paulson today reiterated that this is part of an "evolving private-sector-led effort" to ease the nation's housing crisis but he specifically avoided the word "recession."
Paulson said that Project Lifeline and other efforts were not "a silver bullet that will undo the excesses of the past years, nor are they designed to bail out real estate speculators or those who committed fraud during the mortgage process."
The plan may be just what struggling homeowners need to get ahead of their payments, but it's unclear whether those who face less immediate threats will get the help they need -- especially when it comes to refinancing their mortgages. That includes people like Larry, a homeowner from Ohio contacted by ABC News, who asked that his last name not be used.
Larry says he is running out of time. This spring the interest rate on his home loan will increase and, though he and his wife earn more than $90,000 a year, Larry doesn't believe they'll be able to afford higher mortgage payments.
He has sought to refinance his adjustable rate mortgage with three different lenders but was rejected by two, and it's unclear whether he'll be able to get any help from the third.
The father of three, has admittedly poor credit and is worried that his family will lose its suburban Ohio home.
"I guess I've just got to find somebody who will invest in me and give me a second chance," he said. "I don't know if there's a whole lot of people out there doing that."