Key banks to pause before foreclosure

WASHINGTON, Feb. 12 (UPI) -- U.S. Treasury Secretary Henry Paulson Tuesday announced a joint initiative with key banks to stall foreclosures on some mortgages on the verge of foreclosure.

Paulson said the project, dubbed, "Project Lifeline," would extend a 30-day grace period to homeowners who haven't made a mortgage payment for 90 or more days.

Housing and Urban Development Secretary Alphonso Jackson said Project Lifeline would provide, "a pause," before banks moved ahead with the option to foreclose, The Wall Street Journal reported.

It is intended as, "literally a lifeline for people on the brink of the final step of foreclosure," Jackson said.

The 30 days is meant to provide time to negotiate new terms on near-crisis mortgages. Bank of America Corp., Citigroup, Inc., Countrywide Financial Corp, J.P. Morgan Chase and Co., Washington Mutual Inc., and Wells Fargo and Co. have all agreed to participate.

Nationally, more than 1.3 million mortgages are close to delinquent and the rate of foreclosures for 2008 could be four times the rate of 2007, rising to a million this year, analysts said.

But, Bruce Marks, chief executive of the Center for Responsible Lending called the project, "a PR stunt." Pausing before a foreclosure should be automatic, he said.