Winners and losers in Bush mortgage plan -- which one are you?

Now that the details are available, there are clear winners and losers in the mortgage bailout plan negotiated by the Bush administration. Just to be sure this is clear -- the plan does not involve a taxpayer bailout. It's a negotiated agreement worked out with mortgage servicers and investors and does not involve using taxpayer money.

The agreement lumps the approximately two million people whose subprime ARMs are due to reset to higher interest rates into three groups. About 600,000 of them are expected to lose their homes to foreclosure, 600,000 are expected to refinance or pay the higher rates and about 600,000 will be able to freeze their rates. In order to get any help the home must be owner-occupied.

The group that will lose their homes to foreclosure are people who have been 60 days late with more than one payment in the last year. These folks will be assisted with the process of foreclosure by credit counselors. If you fall into this group, you may want to contact an attorney. Judges have denied foreclosures to banks because they can't prove they actually hold the note. If your mortgage was sold a few times after closing then your current mortgage servicer may not have the original paperwork needed to prove ownership of the note and the banks seem to be having a hard time sorting all this out.

The group that won't qualify for an interest rate freeze are those with credit scores above 660 and who have 3% or more equity in their homes. These folks will be expected to either pay the higher interest rate or refinance to a different loan.

The 600,000 that are expected to qualify for the interest rate freeze are people who have been making their payments on time, but have a credit score below 660 and less than 3% equity in their home. If you need help, call the Center for Foreclosure Solutions at 888-495 HOPE (4873). This hotline handled more than 50,000 calls in the third quarter of 2007, so you're not alone. The center is a collaboration of housing counselors, mortgage servicers, investors and other mortgage participants. If you have trouble getting through or don't find the help you want, you should then call a HUD approved Housing Counseling Agency at 800-569-4287. If you prefer, you can find one near you using the HUD website.

Lita Epstein has written more than 20 books including "The 250 Questions You Should Ask to Avoid Foreclosure."
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