The Bush administration has announced a new mortgage industry coalition aimed at helping homeowners avoid foreclosures.
Treasury Secretary Henry Paulson said the initiative, called HOPE NOW, would coordinate efforts by financial companies to help an estimated two million homeowners whose introductory mortgages with low rates are now resetting at much higher rates, greatly increasing their risk of defaulting on the loans.
Mortgages resetting from low “teaser” rates could mean an estimated extra $250 to $300 in monthly payments on the typical $1,200 monthly mortgage payment.
Paulson said 11 of the largest mortgage service companies, representing 60 percent of all mortgages in the country, had agreed to join the new coalition. Other members will include mortgage counseling agencies, investors and large trade organizations.
American Securitization Forum, which represents investors who buy mortgages that have been repackaged into securities, has agreed to join the alliance.
Source: Houston Chronicle