Who qualifies for the new Government Backed Mortgage Bailout?
Mortgage Bailouts are typically plans designed to allow a homeowner to partially “bail out” of their mortgage loan. In most cases, it doesn’t mean that all debts are forgiven. Generally, the plan just aids the homeowner so that the home is not lost to foreclosure. This can involve either freezing or reducing the mortgage interest rate for the loan. The new government sponsored mortgage bailout initiative will cover as many as nine million mortgage holders. It has two main components. First, the government will offer financial incentives and subsidies to persuade mortgage-servicing companies to ease up on borrowers who are in financial straits so severe that they risk losing their homes. Borrowers will have to sign affidavits attesting to their financial hardships. In return, they will see their interest rates drop to as low as 2%, their payment periods lengthened, and other modifications aimed at bringing their monthly payments to 31% of their income — commonly considered a reasonable
