Bailout bill may help homeowners at risk of foreclosure

— -- Homeowners at risk of foreclosure may benefit from provisions in the bailout bill designed to modify their mortgages.

The goal: Cut the payments enough so that homeowners can make them reliably.

Organizations like the National Association of Realtors are pleased with the legislation not only for helping individual homeowners but because fewer foreclosures will help stabilize the housing market.

"Now there is an ability to hopefully quickly modify loans that people are having trouble paying and that will lessen the foreclosures," Lawrence Yun, chief economist of the National Association of Realtors says.

The details are thin right now about how and which loans will be modified, says Yun, adding that he hopes the government creates a formula to evaluate mortgages quickly, rather than trying to look at them case by case.

The plan requires the government to implement a plan for modifying troubled mortgages it actually acquires — as opposed to loans underlying securities it buys.

Changes may include lengthening the loan, reducing interest rates or writing down some principal.

Also, owners who live in the home and whose loans meet certain criteria, can go into the Hope for Homeowners program. Set up in the recent housing bill, to provides for refinancing into fixed-rate loans insured by the Federal Housing Administration.

It is difficult now to say what effect the bill will have on loans backing securities the government buys.

"One of the big issues not addressed in the bill is the role of the loan servicers," says John