As more than 5 million Americans fall behind on mortgages, banks signal a new willingness to reduce the principal.
The government will help homeowners restructure shaky mortgages financed by Fannie Mae and Freddie Mac, but partisan debate looms over how to keep up the aid.
Help for strapped homeowners may not be forthcoming until next year; ramping up the new government programs will take months.
A handful of community-development institutions offer modified interest rates to at-risk borrowers.
A housing alliance, including some of the nation's biggest lenders, is working with mortgage-service companies to modify loans rather than let them fall into foreclosure.
Banks have begun to modify loans for mortgage-holders, but experts say not nearly enough.
Federal rescue efforts could match the $124 billion cleanup of the savings-and-loan crisis in the 1980s.
'Project Lifeline' is the Bush administration's latest step to ease the woes from the subprime-loan debacle.