On Thursday, President Bush jumped further into the Foreclosure fray announcing his plan to help homeowners facing foreclosure. The plan is billed as helping homeowners, and it does help a certain segment. However, it also is designed to salvage the bad loans made by the mortgage lending industry...

On Thursday, President Bush jumped further into the Foreclosure fray announcing his plan to help homeowners facing foreclosure. The plan is billed as helping homeowners, and it does help a certain segment. However, it also is designed to salvage the bad loans made by the mortgage lending industry. The plan is essentially an agreement among lenders to make loan modifications. It is only offered to subprime borrowers who can currently afford the loan starter rate on their subprime. It does not help subprime borrowers whose loan rates have already jumped. And it does not help homeowners who are currently in default.

Lenders have agreed to do one of three things:

1. Refinance an existing subprime loan into a new private mortgage, presumably at a fixed rate;

2. Convert the loan to a so-called FHASecure loan. This is a loan through the FHA for borrowers with good credit history who cannot afford their existing payments (but who are not in default); or

3. Freeze the loan interest rates for five years.

This program is not law, its a voluntary agreement among lenders. Its likely that legislation will be proposed that will contain some elements of Bush's plans. It may also expand some of the provisions to help borrowers who are currently in default.

Borrowers who believe they can be helped by this Bush's plan can call 1-888-995-HOPE for further information. This a toll-free hotline which is available 24-hours a day.

Further information can be found at the White House website.