Major US mortgage lenders have agreed to an "outreach" program to help homeowners facing possible foreclosure, Treasury Secretary Henry Paulson announced Wednesday.
The program comes weeks after President George W. Bush unveiled an initiaitve to help at-risk Americans keep their homes during a credit crunch and housing downturn that has upended financial markets.
Paulson said 11 of the largest US loan servicers representing 60 percent of the mortgages in America "have come together and formed a partnership to help more Americans keep their homes."
The initiative, called "Hope Now," is aimed at coordinating and improving outreach to struggling borrowers, many of whom face higher payments when adjustable-rate mortgage loans from prior years are reset at higher rates.
"A unified strategy and better integration will mean homeowners get better help with their mortgages, servicers get better responses when they reach out to people, and our communities will see fewer foreclosures," the Treasury chief said.
At the same time, Paulson warned that he is "not announcing we have solved this problem. What we're announcing is a necessary step toward a very important objective."
Paulson said rising interest rates and stagnant or falling home prices are creating "real challenges" for US homeowners.
He said that even before the initiative was announced, mortgage servicers were beginning to increase outreach to borrowers, and state and local governments were setting up programs to help borrowers.
