Could someone PLEASE put this "bailout" thing in layman's terms?

I’m somewhat embarassed to write this, but for the love of God, could someone please explain to those of us who aren’t experts in economics just what is going on with this $700 billion bailout plan? I’ve tried to understand, really I have, but it’s just not sinking in.

So some banks wrote some mortgages to people with bad credit or insufficient income. But I’ve also heard that the vast majority of these are being paid – 96% of them if I’m not mistaken. Am I to believe that the 4% that aren’t being paid are worth $700 billion? And besides, these houses will eventually be re-sold. These are real assets that hold value. I understand there will be some loss as the houses may be sold for less than the banks paid for them but even then I fail to see how the difference adds up to hundreds of billions of dollars.

Please, help a layman understand what’s going on here.