Details of administration's housing rescue plan released

WASHINGTON -- The Obama administraion on Wednesday released detailed guidelines to let the lending industry know how to enroll borrowers in the foreclosure prevention program it announced last month.

To help borrowers determine if they are eligible, the government has put details of the plan and answers to common questions on the website http://www.FinancialStability.gov.

"It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets," Treasury Secretary Timothy Geithner said.

To help homeowners remain in their properties, lenders will be responsible for lowering interest rates.

All that is expected to mean even more business for servicers.

"Big servicers are at capacity. They're strapped right now," says Sue Allon, CEO of Allonhill, a financial services firm specializing in risk management of mortgages.

Also, Allon says, the mortgage companies are not experts in loan defaults, so they're being forced to work outside their areas of expertise. That could lead to long waits, slow response rates, and superficial fixes.

Many already are busy because low interest rates have already led to increased refinancing requests.

Some have taken steps to prepare. Luxury Mortgage in Stamford, Conn., has seen such an influx in demand that it has hired several new mortgage brokers and plans to hire more.

"I have reservations about whether our existing infrastructure is adequate," says David Adamo, Luxury Mortgage CEO, referring to his industry.

Wells Fargo said in a statement that it is staffing for an increase in volume. Fannie Mae also says it is prepared.