Critics find many holes in governments plan to rescue homeowners facing foreclosure.

The government plan to help homeowners who have mortgage loans that are set to adjust within the next 3 years has been drawing sharp criticism. What is believed to have been step one in helping to fix the housing problems in the U.S., Secretary Paulson and mortgage lenders agreed to freeze rates on adjustable rate mortgages. However, many critics believe after reading the plans fine details that many people will not qualify for the help. Lenders have a right to examine the homeowners income & payment history. Borrowers who took out a 2/28 sub prime loan in 2005 may miss the cut off date of the rate freeze and are amongst the loans with the highest default percentages. Option arms, which are negative amortizing adjustable rate mortgages may also not qualify for the rate freeze. The government earlier in the year indicated they would reform FHA mortgages, to help more people qualify and assist with the housing challenges but these measures have since stalled. 

12-13-2007 © LoanNetwork.com

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