Paulson Outlines New Initiative To Avoid Foreclosures

Treasury Secretary Henry Paulson and six major banks announced a new plan to help homeowners avoid foreclosure. The new plan will not only focus on subprime, but will also help alt-a and prime borrows.

The plan will give serious delinquent borrowers 30 days work out a plan with the mortgage company on loan modifications.

Letter to homeowners more than 90 days delinquent will give details on how they can pause the foreclosure process. The homeowner will have 10 days to respond to the notice and provide the mortgage company will information so the lender can provide the borrower with options.

Bank of America (NYSE: BAC), Citigroup (NYSE: C), JPMorgan Chase (NYSE: JPM), Wells Fargo (NYSE: WFC), Washington Mutual (NYSE: WM) and Countrywide (NYSE: CFC) will participate in the plan.