Mortgage Foreclosure & Refinance Resource

The Boston Federal Reserve Bank and five U.S. banks unveiled details of a $125 million Mortgage Relief Fund to help New England homeowners who are facing potentially unfordable increases in their monthly mortgage payments refinance into fixed-interest-rate home loans.

The Mortgage Relief Fund should make it easier for some homeowners who are paying high rates and those who face a reset of an adjustable rate mortgage to refinance.

The five banks involved are Citizens Financial Group, a unit of Royal Bank of Scotland Group Plc, Sovereign Bancorp Inc TD Banknorth, a unit of Canada’s Toronto-Dominion Bank Bank of America Corp and Webster Financial Corp.

The program, like several initiatives already underway, is intended to contain the foreclosure crisis by focusing on borrowers who can afford their monthly mortgage payments now, but not when scheduled rate increases drive up their monthly payments. Borrowers who are already facing foreclosure will not qualify for the loan program.

Former Federal Reserve chairman Alan Greenspan suggested Sunday that the federal government should consider giving money to homeowners who can’t make mortgage payments.

“It’s far less damaging to the economy to create a short-term fiscal problem, which we would, than to try to fix the prices of homes or interest rates,” Greenspan said on ABC’s “This Week.”

The suggestion was quickly rejected by the Bush administration, which focused on encouraging action by mortgage companies. For example, this month the administration brokered a deal in which mortgage holders agreed to freeze interest rates on some subprime loans.