Mortgage Foreclosure & Refinance Resource

Here a few more more points on the mortgage bailout as found from other sources on the web:

• Bailout in a finance term used to describe a situation where a bankrupt or nearly bankrupt entity, such as a corporation or a bank, is given liquid funds, in order to meet its short term obligations. Often bail outs are by governments, or by consortia of investors who demand control over the entity as the price for injecting funds.This is not a bailout. There is no federal money involved or any other sort of injection of capital going on.
  
  
• The plan is voluntary - not a bill or a law - this is not government regulation. This is an outline of terms of loan modifications that are suggested to lenders
• According to The New York Times, estimate only about 145,000 mortgages qualify under the proposed terms and these aren’t big mortgages — average value almost surely under $200,000.
• The forgotten part of the announcement: The rate freeze is getting the attention, but the really significant part of this deal is likely here — and it’s being missed while everyone’s dazzled with the rate freeze details. Allowing municipalities to buy up these mortgages using tax free bonds. Since they’re tax free, that IS Federal money in a way. It’s also a ton of public money (city,state,federal) lining up for this. This could be the first step towards the government buying all the defaulting mortgages, and bailing out Wall Street.
• In a piece entitled, “Bankers Hope Bush Subprime Plan Will Scuttle House Bill,” CongressDaily reports that
  

  the mortgage industry hopes a White House plan designed to aid subprime borrowers at risk of losing their houses will help scuttle congressional efforts to refashion mortgages through the bankruptcy code. . . The announcement comes as Congress moves ahead with plans to make it easier for bankruptcy judges to refashion home mortgages that are on the verge of foreclosure — legislation bitterly opposed by the housing industry. Bankers said they hope to use the White House approach as a prime example of why the bankruptcy legislation should not move forward, emphasizing that a voluntary effort can cover many of the estimated 2 million subprime loans that are scheduled to reset to higher rates over the next two years.

Sources: NYTimes.com, CongressDaily, Calculated Risk