Home Foreclosure - How Many Home Foreclosures Can Bush Plan Stop

The Bush administration has come up with a plan to help strapped homeowners facing a daunting jump in their monthly mortgage payments who could potentially face home foreclosures in next few years.The proposal, reached in negotiations led by Treasury Secretary Henry Paulson with the mortgage industry, would freeze introductory "teaser" rates on subprime mortgages, preventing them from resetting to higher rates for five years. For the news about this, click here:

But, how many home foreclosures can be stopped? Let's look at what is in the plan.

There are  about 2 million subprime mortgages in the coming years. Those 2 million subprime mortgages or home loans provided to borrowers with spotty credit histories - could be reset from their introductory rates of around 7 to 8 percent to levels as high as 11 percent, adding hundreds of dollars to the typical monthly payment, if nothing is to be done. Those are the home owners will face home foreclosure.

now, according to the plan, the mortgage companies will offer to freeze the loans at the lower introductory rates as long as the borrowers did not miss any payments at the lower rate.  Those had missed mortgage payments would be out of luck.

Under the administration plan, the rate freeze will apply to mortgage loans made at the start of 2005 through July 30 of this year and will cover loans that had been scheduled to rise to higher rates between Jan. 1, 2008, and July 31, 2010. Those who got the loans before 2005 with 3 or more years ARM are not covered in this plan.

Based on those facts, only about a quater of millions those subprime mortgage loans will be benefits from this plan and 75% of home owners with subprime mortgage loans will still have to face home foreclosure.

More about the home foreclosure:

A subprime bailout plan that works
The government's FHASecure program could get a quarter of a million troubled borrowers out of unaffordable loans.

NEW YORK (CNNMoney.com) — One government response to the subprime mortgage crisis is up and running and on track to help a significant number of borrowers avoid losing their homes.

The Federal Housing Authority's FHASecure program offers refinancing options to move delinquent hybrid ARM borrowers into reasonable, fixed-rate loans. It should help about 250,000 home owners through 2008, according to Department of Housing and Urban Development spokesman, Steve O'Halloran. FHA is part of HUD. More..

October foreclosure filings surge
More than 50,000 lost their homes in October; foreclosure rates expected to rise in 2008 as adjustable-rate mortgages reset.

NEW YORK (CNNMoney.com) — Foreclosure filings have nearly doubled from a year ago and more people could lose their homes in 2008, according to a report released Thursday.

In October, 224,451 foreclosure filings were reported nationwide, up 94 percent from October 2006 and up 2 percent from September, according to RealtyTrac.

In the month, 53,609 U.S. homeowners were forced out of homes repossessed by banks, up from 20,768 a year ago, the firm said. Through October, a total of 309,557 homes have been repossessed by banks leading to forced evictions. More….

 

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