More companies have signed on the "Project Lifeline," an agreement among mortgage industry players brokered by the Treasury Department, which is summarized in this blog on February 13 (here). As reported here, members of the Hope Now Alliance, which comprise of companies who service over 90% of subprime loans and 70% of all loans, have signed on to the deal.
It is questionable what effect Project Lifeline will have on reducing mortgage foreclosures. While it may give delinquent borrowers a breather, it does not appear that lenders and mortgage servicers are going to be reforming the terms of many subprime loans. In fact, a top Treasury Department official commented that proposals that "would retroactively change contracts on existing loans" could cause long-term harm to the housing finance system because it "would make it more difficult for future subprime borrowers to get into a house in the first place."
Meanwhile, foreclosures continue on an upward trend, with a report yesterday that January foreclosures increased 57% over 2007 and were up 8% from December 2008.
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