Under a new program called Project Lifeline, some foreclosure proceedings will be postponed for 30 days. While the effort has a hopeful name, it may provide only temporary help and hope for seriously delinquent borrowers.

Six of the nation's largest mortgage lenders have temporarily stopped foreclosure proceedings against delinquent borrowers in a joint effort to help Americans keep their homes. The participants have formed the so-called Hope Now Alliance, which consists of Bank of America, Citigroup, Countrywide Financial, J.P. Morgan Chase, Washington Mutual, and Wells Fargo. Together, these lenders account for at least half of the mortgage servicing market in the U.S., and the Alliance is cooperating to promote a new program dubbed Project Lifeline.

Under the program, lenders agree to stall the foreclosure process for 30 days in order to give homeowners a chance to get back on track. During that interim period, lenders will try to rework mortgage agreements in a way that makes them more manageable, so that the looming foreclosures can be permanently halted. Project Lifeline will not be limited to those homeowners who have adjustable-rate mortgages (ARMs) or subprimes, but will extend to all types of mortgages and borrowers in every category and demographic.

Rhetoric or Reality?

Despite the fact that the plan has been touted in press conferences involving everyone from the Secretary of Housing and Urban Development to the President of the United States, it may wind up being more rhetoric than reality. For example, even as the program was unveiled with great fanfare, National Public Radio reported that for every foreclosure forestalled or prevented, more than a dozen other homes enter into the foreclosure process. Critics of the proposal say that it's too little, too late, and will fall short of providing the kind of urgent help needed at this stage in the widening crisis. But fans of the plan, including Treasury Secretary Henry Paulson, argue that it will give borrowers the time they need to do a mortgage refinance and get out of their expensive loans.

In order for that to happen in a timely manner, however, lenders need to be flexible, lenient, and prompt in their responses. For starters, they need to get busy working the phones to communicate and negotiate with their customers. Although lenders have been promising for months to rework troublesome loans, only about half of those who hold bad mortgages have even been contacted by their banks.

AFL-CIO President John Sweeney is skeptical, and called Project Lifeline a Band-Aid. Senator Dick Durbin of Illinois offered reporters his own poetic description of the plan, saying "Homeowners at risk of foreclosure are floating 50 feet from shore, while Project Lifeline throws them a 30-foot rope." For those borrowers who face foreclosure soon, the rope will indeed be a bit too short. In order to qualify for Project Lifeline, a homeowner will have to be at least 30 days away from foreclosure.