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What Is The Mortgage Bailout Plan? The
Mortgage Bailout Plan in the United States (also referred to
as a Mortgage Relief Plan) is a proposal from the Bush administration
to resolve the current mortgage crisis in the United States.
On December 6th 2007, President George Bush and Treasury Secretary
Henry Paulson unveiled a plan to assist homeowners who were
victims of mortgage loan fraud and confusion. The plan, however,
was not designed to help everyone.
The Mortgage
Bailout Plan does not assist homeowners with fixed rate mortgage
loans. Only homeowners that have adjustable-rate mortgages qualify
to get their mortgage payments lowered. Even so, only a small
group actually qualify. The home loan must have been received
between January 1st, 2005 and July 31st, 2007, and the homeowner
must be facing a reset of the interest rate sometime between
January 1st, 2008 and July 31st, 2010. Homeowners within this
range may be eligible to have their interest rate frozen.
The plan
has received a lot of criticism from congress and others. However,
President Bush insists that even though it's called a "bailout"
- its not a burden to taxpayers, and the U.S. government is
not shelling out any money. Bush says that the plan just regulates
the "teaser rates" that banks have been giving to
homeowners. With the Mortgage Bailout Plan, their interest rates
can no longer increase causing the homeowners monthly payments
to balloon.
Whether
or not this plan will work, has not been determined. Many critics
believe that the plan is not enough. Only time will tell.
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