Subprime borrowers who can't afford a reset on their adjustable-rate mortgages and have less than 3% equity in their home could qualify for a five-year loan modification under a foreclosure prevention plan worked out by Treasury Department officials and mortgage industry executives that was slated to be unveiled Thursday.Under the plan, the starter rate on subprime 2/28 and 3/27 ARMs originated from Jan. 1, 2005, to July 31, 2007, that are due to reset before July 31, 2010, could be frozen for five years, a source said. It is understood that borrowers who have missed two monthly mortgage payments could still qualify for the streamlined loan modification that freezes the starter rate for five years.

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