Some Needing Mortgage Aid Won’t Get It

When Jirina Koy heard that President Bush was announcing a freeze yesterday on mortgage interest rates, the Stockton, Calif., homeowner felt a flicker of hope.

It was quickly extinguished. After calling a nonprofit housing assistance center, Ms. Koy learned that her mortgage, for all the trouble it was causing her, was not likely to be one of those qualifying for relief.

Mortgage experts say there will be many borrowers like Ms. Koy. The exact guidelines of the rescue plan are still fuzzy, but it is clear that many of those who need aid the most will not get it. The number of households facing foreclosure in the next two years is estimated to exceed two million.

“I’m glad someone’s getting help, but I wish it were me,” said Ms. Koy, 46, who works in the state unemployment office.

She has a so-called option loan, which gives her the choice of how much to pay every month. Heavy in debt, she usually chooses the minimum. The unpaid interest and principal is added to her mortgage balance, which means her loan keeps getting bigger.

Ms. Koy’s woes were compounded by an ill-advised refinancing two years ago.

“I got all these calls from brokers all the time — ‘You could pay off debt, pay off the car loan, make extra money every month, blah blah,’ ” she said. She took out $60,000.

“The only way that would have made sense is if I had cut up my credit cards and nothing else had come up,” Ms. Koy said. “But something else always comes up.”

Ms. Koy’s husband is disabled and has not worked for a decade. The couple’s credit card debt is back up to $25,000, in part because of their daughter’s medical bills. Their three-bedroom house is worth about $250,000, but they owe much more on it.

Kimberley Williams, who owns a small bungalow in Los Angeles, might have a happier fate than Ms. Koy. She bought her home in February 2006, as the boom was peaking.

“I felt that if I didn’t get into the market, I wouldn’t be able to afford a house in California,” she said.

In November 2006, Ms. Williams refinanced. Like Ms. Koy, she got money to pay bills, including paying off her car. But her monthly mortgage payment rose to $3,011. Next December, it will jump by several hundred dollars.

Ms. Williams, a registered nurse, does not regret refinancing, but is worried about possibly being forced to sell in a declining market — or worse.

“Even people with good jobs making good money are facing foreclosure,” said Ms. Williams, 43. She plans to apply for the freeze.

While acknowledging that only a small number of stressed borrowers would be helped, Lori Gay, president of Los Angeles Neighborhood Housing Services, a nonprofit group, called the freeze “a great beginning.”

Michael Shea, executive director of Acorn Housing, another counseling agency, took a different view. “We’re disappointed that a year into this crisis the responses are so lacking in the bold leadership,” he said. “We really need an F.D.R.-like approach, and not Calvin Coolidge.”

Real estate agents in high-foreclosure areas had different opinions about whether the freeze would have an effect on queasy markets.

Jason Bosch, president of Home Center Realty in California’s hard-hit Riverside County, was pessimistic.

“We were selling $300,000 homes to people who could only afford $175,000 homes,” he said. “Even if you freeze their payments, they still can’t handle it.”

In Sarasota, Fla., a real estate agent, Jim Willig, was hopeful that at least the freeze would put a brake on some of the inventory flooding the area.

“That’s a benefit,” said Mr. Willig, who owns seven rental houses, all of them worth less than he paid.

Tom Gutierrez, bought his house in 2004, too early to qualify for the freeze.

Mr. Gutierrez, a school bus driver who lives in West Covina, Calif., is negotiating a new loan. “Many home buyers didn’t do our homework,” he said. “Maybe some kind of education will help as well.”