With the news that more mortgage lenders are signing on to Project Lifeline, there is hope that more foreclosures will be prevented in the US economy. Indeed, between Project Lifeline and Hope Now, the mortgage rate freeze program unveiled late last year, many subprime mortgage lenders are now offering programs to help.
Unfortunately, many affected borrowers may not be helped at all. Some are calling the combined efforts insufficient, and they point to the devasting effect that foreclosures could have on local economies, as well as the US economy. IPS News reports on the problems of foreclosures:
Whole communities are wrecked as pauperised borrowers default on loans and lenders repossess their homes.
Even a few foreclosures in a given neighbourhood can result in increased crime, the devaluation of surrounding properties, the erosion of the local tax base, and consequent revenue shortfalls. In turn, these factors force local authorities to cut public services.
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