Obama housing rescue could help millions

Rules for the Obama mortgage rescue plan were released today. The plan focuses on two distinct groups of borrowers. The first group is made up of borrowers who are delinquent and who want to modify their loans so they'll be more affordable. To qualify for loan modification help, you must have lost your job, suffered a pay cut or face higher mortgage payments. To get help, you will need to meet the strict financial hardship guidelines of Fannie Mae or Freddie Mac.

The second group of people who will be helped consists of those seeking to refinance mortgages even though the equity in their home is lost. This group will be able to refinance even if they need to borrow as much as 105% of their home's current market value. Prior to the rescue with current tight lending conditions, people wanting to refinance could only do so if they had 20% of equity in their home and could borrow a maximum of 80% of the loan value. This rescue will help these people get out of higher interest rate mortgages. Refinancers will not have to meet the strict hardship guidelines.