How does the new mortgage bailout plan work in simple english?

Question

I have heard very little about how it will work, any answers in simple terms?

Answer 1

Step1Gather loan paperwork and check to see what type of interest rate that you have. If it is an ARM, or adjustable rate mortgage, then you would qualify for the new foreclosure prevention plan. Fixed rate borrowers will not be affected by this plan.

Step2Check with your lender, if you are not sure, to see when your ARM interest rate is set to change. If it will reset anytime between Jan. 1, 2008 and July 31, 2010, you will have the option to place the freeze on the rate. Also, your loan must have been originated between Jan. 1, 2005 and July 31, 2007 in order for you to qualify.

Step3Keep your mortgage payments up to date, with delinquencies below 30 days. You will be excluded from the plan that Bush has proposed if you are more than 30 days late or more than 60 days behind at any point in the last 12 months.

Step4Calculate your future budget to see if you could afford the payment on the higher interest rate when it raises. If you can afford the new payment when the rate resets, you will not qualify. If you cannot afford the new payment, the Bush plan will benefit you. People who cannot afford to pay their payment even before it raises, will be ineligible and considered on a case-by-case basis for an alternative solution.

Step5Call for assistance. If you can't afford your payments and are facing a foreclosure, the Neighborhood Assistance Corporation of America could help you save your home. Go to their website at http://naca.com or call 1-888-302-NACA. For those with a good credit standing and payment history, there is help available with the FHASecure program, through the Federal Housing Association. Their website is http://www.fha.gov/, which provides excellent information and an online form to request assistance.