The harsh reality for homeowners behind on their mortgages is this: A $700 billion bailout of the financial industry probably will do little to help them avoid foreclosure.

Today, House lawmakers are scheduled to vote on the package amid intense lobbying from President Bush and industry groups who say the measure is crucial for stabilizing the U.S. economy.

But when it comes to foreclosures, the Treasury Department is directed only to "maximize assistance for homeowners" and write monthly progress reports.

That's not enough to help Murielle Montes, a 46-year-old nursing assistant who faces foreclosure on the house she bought in Brockton, Mass., three years ago.

She has been working with a housing counselor since February to modify her loan but hasn't had any luck. She received a foreclosure notice in August. Meanwhile, the value of her house has sunk to $250,000 from her purchase price of $330,000, she said.

"Where are am I going to sleep? Where are my kids going to go?" asked Montes, who immigrated to the United States from Haiti 20 years ago.

As lawmakers debate the massive rescue plan, many consumer advocates and some homeowners are upset that it would benefit the same Wall Street banks that provided funding for the explosion of subprime and other exotic loans, while making only vague promises to assist homeowners.

The government, Montes said, "should try to buy the loan out so people can refinance . . . and everyone can stay in their house."

But in many cases, the federal government's hands could be tied -- either because the mortgages are pooled into securities sold in pieces to other investors, or because homeowners don't have the financial resources to stay in the property.

Within 12 to 18 months, about 40 percent of U.S. borrowers, or 20 million households, will owe more on their mortgages than their homes are worth, according to Deutsche Bank. The problem will be most severe in California, Nevada, Florida and Arizona, where housing prices soared and reckless lending practices were rampant during the housing boom.

That's almost the same number of American households that are spending 30 percent or more of their income on housing, according to recent U.S. census data. With little cash cushion or home equity, the slightest financial problem can put a family behind on its mortgage and into the realm of foreclosure.

"Only a small portion of problem loans" can be saved, said Deutsche Bank analyst Karen Weaver. "In some cases, the lender is better off just taking back the property and just selling it."

Still, some housing advocates believe borrowers will have better luck with the government than with private mortgage investors.

The government may step up pressure on loan servicers -- which collect and distribute loan payments -- to make changes in loan terms such as reduced interest rates or lowered principal balances, said Credit Suisse analyst Rod Dubitsky.

But while the government would be the largest investor in mortgage securities, "they can't dictate anything" unless they buy whole loans instead of slices of mortgage securities, Dubitsky said.

The Hope Now alliance, a Bush administration-backed mortgage industry group, said yesterday that the industry has performed some form of workout on 2.3 million loans since July 2007. About one-third of those were permanent modifications.