WASHINGTON -- During a panel of government officials and otherstestifying before the House Financial Services Committee Nov. 2,Treasury Under Secretary for Domestic Finance Robert K. Steelexplained the administration's efforts to help stem the rising tideof foreclosures.

The focus of the hearing was the HOPE NOW initiative, which isan alliance of lenders, servicers, and community-based counselorsthat was announced by Treasury and the Department of Housing andUrban Development on Oct. 10. "We should focus on results and noton prescribing a single approach," Steel told Congress. "Preservinghomeownership is the goal, and we must recognize that manydifferent avenues can get us there."

Over two million subprime mortgages will reset in the next 18months, he said. Some homeowners will get a long just fine whilefor others foreclosure is inevitable. However, Steel stated, "Athird group of homeowners facing resets fall somewhere in themiddle. The challenge is for lenders to identify the homeowners inthis middle group, who with a bit of assistance can stay in theirhomes."

The Hope Now Alliance consists of four counseling organizations,17 mortgage servicers and lenders (comprising 60% of the mortgageservicing market), three investor groups, and 10 tradeassociations.

"Since their launch a few weeks ago, the Alliance has beenmeeting regularly and working hard to develop and implement anaggressive plan to help homeowners," according to Steel. Late lastmonth, for example, the alliance announced a direct mail campaigntargeting at-risk borrowers, encouraging them to contact HOPE NOWfor help, with limited success. Steel encouraged lawmakers to urgetheir constituents to make the contact. HOPE NOW is also working toexpand the existing counseling network.

On the industry side, servicers are working to establish a setof metrics for servicer loss-mitigation performance or to evaluatecounselors' effectiveness.