Reporting from Reuters;
President George W. Bush will outline on Thursday a plan to freeze mortgage rates for five years for many homeowners facing sharp interest-rate resets, an industry source said on Wednesday.
The source, who is familiar with details of the plan, said it would cover subprime loans originated between January 1, 2005, and July 31, 2007, with rates that are due to reset between January 1 of next year and June or July of 2010.
The plan is primarily aimed at borrowers who can afford their existing rates and who are current on their payments, but who would face default when the rate resets higher.
Among those borrowers, homeowners whose credit scores have risen since they took out their loan would qualify for “fast-tracked” loan modification that would hold their interest rate steady for five years.
Borrowers whose credits scores had not improved could still qualify for a five-year rate freeze, but would face more scrutiny before receiving any modification.
{ 1 trackback }
{ 6 comments… read them below or add one }
How about those homeowners with neg-am loans/option arms??? Is their any releife for them
Our ARM reset December 1st with 1st payment due January 1st. Because it reset December 1st does this mean we are out of luck in regards to the freeze?
Helena, from my understanding, Neg AM’s are not elligible. But that has not been confirmed as of yet.
Joan, you should be fine based on what I heard.
I will post this info ASAP. Stay tuned.
Are their other programs for those with the neg am/option arm loans???
From my understanding, Neg Am loans and borrowers with these loans are below the cost of funds index and will not qualify. But, let’s see what Bush says at 9am PST and 10EST about this new plan.
I’ll let you know ASAP Helena.
It is very fustrating. My husband and I re-financed our home 3 yrs ago with Wells Fargo, (before 2005), we have been in our home for 10 years. We had hoped we could re-finance our home before our loan adjusted which it did adjust on 11-3-2007. We could never re-finance because somehow our home would not appraise for what we owed. Go figure, how Wells got it to appraise for so much I will never know. We have been in Loss mitigation for 5 months now with no results. Our payment now is more than we can pay and still have living expenses (and I am talking about things like utilities and groceries). The only thing that qualifies us for this plan set forth is our credit score which has been trashed by all this. All we asked Wells to do was give us a fixed rate and add some years to mortgage which they refused to do. We could have kept house and they would still get their money. Mind you we are not stupid people who bit off more than we could chew. We really thought we could re-finance before the adjustment. We had almost perfect credit before all this drama. Maybe we should have just filed bancruptcy 3 years ago instead of re-fincing house to consolidate bills. I think we would be better off today, and that is a shame. Oh yea , our loan also re-sets every six months now. I am about to hand over the keys. I am sick of it.