"Project Lifeline," backed by the U.S. Treasury and the Department of Housing and Urban Development, would pause foreclosure proceedings for borrowers more than 90 days in arrears while servicers determine whether they could make payments under new terms, the six firms said in a statement.
The effort would cover all types of home loans, including home equity loans and second liens, unlike an earlier plan aimed at freezing interest rates for sub-prime mortgage holders who cannot afford payments that reset to higher levels.
"These are homeowners on the brink of losing their homes," Treasury Secretary Henry Paulson said. "Every one we save will make a difference. If someone is willing to make a call to reach out, there's a chance we can save their homes."
The plan unveiled Tuesday is being undertaken by six mortgage lenders that service about 50 percent of U.S. mortgages -- Bank of America, JPMorgan Chase & Co, Citigroup, Countrywide Financial, Washington Mutual and Wells Fargo.