Will you qualify for a mortgage bail-out under new plan?

Faced with a looming tidal wave of foreclosures when millions of mortgages that had a two or three year introductory rate ratchet up to new and often unbearable highs in the next two years, the lenders and the government (as we have reported in previous entries) are working on a bail-out plan. The current status was announced by George Bush on December 6th.

Nothing is definite, but if they go ahead with current thinking, those who qualify for this plan will get a five-year freeze on their interest rate. Or, they could be given refinancing at a rate they can deal with. However, qualifying is not going to be easy.

Here are some of the proposed requirements:

Your mortgage must be a one-year adjustable mortgage issued at subprime rates Jan 1, 2005 and July 31, 2007. The first adjustment or reset must occur between Jan 1, 2008 and July 31, 2010.

If you do not know if your mortgage is subprime, ask the company that sends you a mortgage bill.

You must live in your home and face a payment increase of more than 10% on the first adjustment.

Your credit score must be LESS than 660. If they think you can pay the new, higher interest rate, they are going to make you pay the bill.

You cannot have been more than 60 days late in your payments more than once in the last 12 months.

Even if you do not qualify, you may be able to modify your loan. The CORRECT number (Bush gave out the wrong one) for the group that is supposed to help is 1-888-995-HOPE. For more info on this group, click here.

Comments are closed.