This link below has an article summarizing who can use the Bill to refinance their loan. Below that is an article pasted from http://www.themortgagemess.com/.
http://money.cnn.com/2008/07/30/real_estate/housing_rescue_guide/index.htm
Sadly, the current mortgage disaster is not only a SubPrime Borrower Mess as the main stream media would have you believe. There are literally millions of hard working, dedicated homeowners who are underwater in their current mortgages and need help to get back on their feet. There are several types of mortgages that can Explode and cause borrowers to fall into a foreclosure trap: (1) Short Term ARMs, 2/28s and 3/27s, (2) Interest Only ARMs, and (3) Pay Option ARMs. In most of these cases, the best advice is simply to Walk Away from your mortgage and start fresh.
Short Term ARMs are causing the bulk of the current problem. These loans have a low "TEASER RATE" introductory rate for the first 2 or 3 years. They are NOT negative amortization loans. After the introductory period, the rate shoots upward. Anyone who bought from 2004-2006 with one of these loans is at risk. Combine a 2/28 with a 3 year prepayment penalty and the borrower has a loan that they literally cannot get out of (after year 2 the monthly payments will skyrocket and they cannot refinance without a penalty - unscrupulous?).
Interest Only ARMS have a fixed duration of Interest Only Payments. After that period is over, the loan becomes fully amortizing over the remaining term and the payments are actually HIGHER than what they would be on a comparable 30 year product (because of the shorter remaining amortization period). These higher payments often throw borrowers into foreclosure.
Pay Option ARMS allow borrowers to pay less than the Interest Only amount and the difference accrues against the loan balance. These generally do not "payment explode" for 4-5 years, so we aren't seeing a huge impact from these YET. Lenders often required at least an 80% LTV so borrowers had some skin in the game. Unfortunately for borrowers, decreasing home prices combined with the increased loan balance has left them with little or no equity on a house that they couldn't afford to buy with a conventional loan in the first place. Refinancing out of these loans is very difficult in the current market.
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