President George W. Bush announced a three-pronged housing plan, early Thursday afternoon. The plan is designed to assist 1.2 million people that are struggling with their mortgages. Eligible home-owners fall into three groups.
The first group is comprised of borrowers whose current mortgage rates will reset in the new year. If these borrowers are in good standing, they may be eligible for refinancing into a conventional fixed-rate mortgage.
The second group is made up of struggling borrowers. If these home-owners are deemed ineligible for a modified loan, they will likely face foreclosure.
The third group is for home-owners that fall somewhere in between. Those that meet the following criteria may be eligible for a five-year freeze on their current mortgage rate:
- Your original loan originated between January 1, 2005 and July 31, 2007
- You currently occupy the mortgaged home
- Your credit score is less than 660
- You are no more than 30 days behind on your mortgage payment