Mortgage Bailout Agreement Reached

As we posted yesterday, a deal has indeed been made to freeze rates on some adjustable mortgages.

However, the freeze has some limitations.

Of the perhaps 2 million sub prime adjustable rate mortgages (ARMs) that are expected to reset through the end of 2009, perhaps only as many as 240,000 of these qualify.

It excludes anyone more than 30 days late at the time the mortgage would reset or anyone who has been more than 60 days late at any time within the previous 12 months.

It also only covers borrowers with ARMs resetting beginning in 2008 and leaves out any borrowers judged capable of continuing to make mortgage payments at the higher reset rates.

Borrowers who can't afford the loan even at low introductory rates also will be ineligible.

The aid will be available only to those who ask for it. A hot line has been set up for those in need of the assistance: 1-888-995-HOPE

Bush said Thursday, “We should not bail out lenders, real estate speculators or those who made the reckless decision to buy a home they knew they could never afford. But there are some responsible homeowners who could avoid foreclosure with some assistance”.