“Project Lifeline” may be just more posturing.

The current Administration has come up with a new plan to “help folks in foreclosure”. Don’t you just love how we all become “folks” whenever politicians talk? …. Anyway , the latest brainstorm out of D.C. came last week when Treasury Secretary Paulson introduced “Project Lifeline” and, not surpisingly, Al Jackson, Secretary of HUD quickly stood behind it. The plan in it’s simplest analysis is for the Administration to “encourage” 6 of the nations largest lenders, who are collectively responsible for more than 50% of all mortgages nationwide to offer a “freeze” on any rate adjustment that may send a homeowner over the edge. This is not limited to “folks” with sub prime ARM’s but also extends to less risky borrowers with Alt-A and even prime loans.

O.K……. Sounds like a plan Stan. But a closer look and another story.

- The freeze is temporary, limited to 30 days. (Uh…how does that help)?

- The borrower must be at least 90 days behind. (O.K Honey let’s stop paying).

- The homeowner must “affirm” to the lender that they want to keep the property. (Sounds like a lot of “folks” don’t).

- The program is not available to a borrower who has a foreclosure sale date within 30 days. (Now isn’t that the guy who really needs more time)?

I guess I could say – here’s my question – but that would be so understated and all of my questions would take more time than “Project Lifeline” may be worth.

I, on occasion throw crumbs to birds and than feel as though I’ve helped feed them. When I do, I know it’s not going to last long and that I can’t feed them all. 

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