Recently, around six of the country's biggest home mortgage lenders announced that they will temporarily halt some foreclosures in order to allow homeowners a reprieve of 30 days to renegotiate their loans.

The recent pronouncement by lenders like Countrywide Financial, which is Florida's largest mortgage lender, Washington Mutual, Bank of America, Citigroup, Wells Fargo and JP Morgan Chase, went into effect as the nation's economy continues to slide toward a deep recession, according to forecasts by leading economists.

What Washington Is Doing To Reverse The Trend

In Washington, the leaders of major home lenders and U.S. Treasury Secretary Henry Paulson met to announce the launch of Project Lifeline, a program that is aimed at helping homeowners who are at least 90 days behind their monthly mortgage payments. Homeowners however, would not qualify for the plan if they are already in bankruptcy; have a foreclosure sales date less than 30 days away; or bought a home as an investment; or if the property is not occupied.

The US Treasury Secretary noted that the project "has the potential to offer new solutions to responsible, able, homeowners who want to keep their homes." He also added that the $168 billion economic stimulus package that President Bush recently signed, as well as the government's housing initiatives, would help to jump-start economic activity. However, some critics voiced that much more needs to be done in dealing with the next wave of foreclosures in the coming two years.

How The Plan Would Help Affected Homeowners

According to mortgage industry analysts in Florida, a 30-day reprieve might help a few people catch their breath, but that it won't be enough to resolve the mortgage crisis. Some economists are forecasting that the number of foreclosures could soar to 1 million this year and next year, which would almost double the rate set in 2007.

The concern has grown even more rapidly in South Florida, where the housing boom of 2000-2005 has ed some to buy homes they could not afford, and more than 3,750 homeowners were at least 90 days lagging on their payments in Palm Beach and Broward counties at the end of December, according to data from Realestat.com. This figure is almost three times the number of homeowners who lagged behind on their payments in December 2006. Project Lifeline will benefit holders of all types of mortgages, and represents a broadening of an initiative announced by President Bush in December that offers a freeze in subprime mortgage rates that are scheduled to be reset to sharply higher rates for home borrowers who qualify for assistance.

Economist note that they see little hope for a quick turnaround of the nation's economy. Many note that it can be a nasty recession and long, when it is a consumer-led recession, and a lot of economic signals show a recession has already begun, and it could be deep.

Some also note that the credit crunch "would be lengthy and difficult to resolve, as the housing crisis is a direct body blow to the consumer and also to the largest capitalization market in the world, for mortgage-backed securities. Many worry that It will take a long time to rehabilitate the high indebtedness of corporations and consumers, as the estimated losses to the financial sector range between $400 billion and $650 billion.

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