Foreclosures are going up and up. This week the Bush administration announced a plan to freeze interest rates for certain homeowners, in an effort to stem the tide of new foreclosures.

The plan was unveiled this past Thursday. It is thought that the program may help as many as 1.2 Million homeowners facing increasing interest rates on their adjustable rate mortgages.

According to the National Association of Realtors, and Business Week On-line, here are the details of the plan:

"Which adjustable-rate mortgages are affected? To qualify to have their interest rate frozen for five years, home owners must have received a loan sometime between Jan. 1, 2005, and July 31, 2007, and be facing a reset of their interest rate sometime between Jan. 1, 2008, and July 31, 2010."

"Who qualifies for this deal? Home owners who haven't missed a payment, but who might if their mortgage resets. Those who can't afford the higher payments, and who have credit scores below 660 and less than 3 percent equity in their homes, will get the biggest break from the lenders. People who are financially secure enough to pay the higher mortgage payments don't qualify."

"Do owners of second homes or investors qualify? No. The plan excludes people who don't live in the property that's facing foreclosure."

"Why didn't the plan go further? If home owners are going to pay less on their mortgages than investors expected, then people are going to lose money. Not all of those people are fat cats. Potential losers include pension funds for teachers, firemen, police and an array of mutual funds whose clients are individual investors."

On the local level, The Iowa Attorney General'soffice is offering assistance for consumers who believe they were the target of predatory lending, or who need assistance in negotiating a freeze on further adjustable rate increases.

Let's all hope we can get this under control. If this plan works, I suppose we all benefit!

Brian Wentz, Realtor, ABR, CBR
Burnett Realty

515-334-4994
www.BrianWentzRealtor.com