"At this age, I'm getting ready to start all over again," said Hilda Barney.
Barney, her husband and 2-year-old daughter are just three weeks away from losing their home. The bad news came in the mail after the loss of a job and a ballooning mortgage rate led the Barneys to miss three months of payments.
"Each year, the rate goes up and up, and you get stuck," Barney said.
On Tuesday, there was word of possible relief from Washington.
Some of the nation's biggest lenders are signing on to a program to help people who are more than 90 days behind in their payments. They'll be evaluated to determine if they're financially fit enough to stay in their homes. If so, foreclosure would be put off for at least 30 days as new terms are considered.
Across the country, more than one million people may lose their homes to foreclosure this year. Some say this program is too little too late.
"When we see their actual situations, about half of them can do something, work with their lender or get a small loan to get current on their mortgage, but the other half, there's really nothing they can do," said Michael van Zanlingen, Neighborhood Housing Services.
"If you're struggling and you don't have the capability to stay in your home, this won't help. And of course, if you want to walk away from the home and the mortgage obligation, there's nothing we can do to help you," sai d Henry Paulson, U.S. Treasury Secretary.
Barney received a call late Tuesday from her lender, Washington Mutual. She and her family can stay in their home as long as they make a month-and-a-half's payment by the end of March.
"I felt a little better today than I've felt in the last four months," she said.
Still, Barney needs to come to terms on a lower interest rate if she and her family are to stay in the house into spring.The new program will be available to the holders of all types of mortgages from prime to subprime and represents a widening of an initiative announced by President Bush in December that offers a freeze on subprime mortgage rates that are scheduled to reset to sharply higher rates for borrowers who qualify for the assistance. Critics said much more assistance will be needed to prevent what is expected to be a tidal wave of foreclosures in the coming two years. "A monthlong moratorium on mortgage foreclosure is like a Band-Aid when the patient really needs surgery," said AFL-CIO President John Sweeney. "Homeowners at risk of foreclosure are floating 50 feet from shore while Project Lifeline throws them a 30-foot rope," said Sen. Dick Durbin, D-Ill. Durbin is pushing legislation that would let homeowners facing foreclosure alter the terms of their mortgages in bankruptcy proceedings to make their payments more affordable, something current law does not allow. Senate Banking Committee Chairman Christopher Dodd, D-Conn., who will hold hearings on the housing crisis with Paulson and Federal Reserve Chairman Ben Bernanke on Thursday, said the administration should consider his proposal for a Homeownership Preservation Corp., which would buy mortgages at steep discounts from mortgage firms and banks and then rework the loans based on the reduced value of the properties, making the payments more manageable. Dodd said the new mortgage moratorium "will not stem the tide of the millions of foreclosures we are facing in the coming months." Sen. Chuck Schumer, D-N.Y., said the problem was that the administration's latest effort does not address the fact that more than 30 percent of homeowners who bought in the last two years owe more on their mortgages than their houses are currently worth, saying the problem will not be adequately addressed until lending institutions cut down on the borrowers' debt. The current crisis reflects the steepest slump in housing in more than two decades, a severe downturn that followed a five-year boom that saw home sales and prices both hit record levels, only to come crashing down over the past two years. Homeowners who had counted on being able to refinance their adjustable-rate mortgages before they reset to sharply higher rates have been caught in the sharp downturn as home sales and prices have plunged in many parts of the country. The slump in housing has spread to the overall economy, pulling growth to a near-standstill in the final three months of last year and raising fears of a possible recession. Paulson said the $168 billion economic stimulus package that President Bush will sign on Wednesday plus the administration's various housing initiatives would all help to jump-start economic activity. He told a news conference that the "worst isn't over" yet for housing in terms of the estimated 1.8 million subprime mortgages -- loans offered to borrowers with weak credit histories -- that are scheduled to reset to sharply higher rates over the next two years. The 30-day mortgage moratorium effort will begin with letters sent by the six financial institutions to homeowners who are seriously delinquent on their mortgage payments, asking them to contact their mortgage servicer. A sample letter begins, "You are being considered for a loan modification, which is a change in the original terms of your mortgage contract. If you qualify, this could reduce your interest rate or extend the time you have to repay your loan, or both." To be considered for the 30-day foreclosure moratorium and a possible loan modification, the homeowners receiving the letter will have to contact their mortgage servicing company at a phone number provided in the letter. The Mortgage Bankers Association reported that at least 1.3 million home mortgage loans were either seriously delinquent or in foreclosure at the end of the July-September quarter. Private economists are forecasting that the number of foreclosures could soar to 1 million this year and next, about double the 2007 rate. Under the guidelines, homeowners would not qualify for the moratorium if they are already in bankruptcy or if they have a foreclosure sales date less than 30 days away or if the home had been purchased as an investment property or was not occupied at the current time. The six participating banks are Bank of America Corp., Citigroup Inc., Countrywide Financial Corp., J.P. Morgan Chase and Co., Washington Mutual Inc. and Wells Fargo & Co. They account for 50 percent of the mortgage servicing market. They are all members of the Hope Now Alliance, an industry group that is trying to coordinate a response to the mortgage crisis. Officials urged homeowners to call the group's toll free hot line number at 1-888-995-HOPE for assistance. The Associated Press contributed to this report.