Over 200,000 troubled borrowers will receive a letter from mortgage servicers advising them to seek new loan terms before they face foreclosure under a plan announced on Wednesday by US Treasury Secretary Henry Paulson.
"Foreclosures are not only painful for homeowners, but are costly for servicers and investors, who in many cases are better off when they can modify or refinance a mortgage and keep the homeowner in his home," Paulson told reporters after meeting with representatives of the home loan industry.
The one-page letter mailing to borrowers identified as at risk of losing their homes will begin Nov. 19th.
Early this month, Paulson announced that a coalition of mortgage service companies, counselors and trade associations were banding together to offer help to hard-pressed homeowners.
Wednesday's announcement will be the first public follow-up on that initiative.