The Bush administration announced a plan that freezes interest rates for some credit-challenged homeowners who purchased their homes with sub-prime loans for a period of five years.   

The President also called for  Federal Housing Administration reforms to lower borrowing requirements for FHA conforming loans  Eligible borrowers are those holding adjustable rate mortgages that are about to reset to higher rates and who remain current in their payments.    

The move potentially minimizes losses to banks, securities investors, and the economy, by keeping more homeowners out of a foreclosure or bankruptcy status.     

The interest freeze is only available to homeowners occupying their homes, and not for real estate speculators. But any freeze on mortgage interest rates amounts to a subsidy that does nothing for the homebuyers who did all the right things, including buying within their means.    

While this debate goes on, other help is on the way. This week, mortgage interest rates fell to two-year lows. Some borrowers may be able to refinance their loans into safer fixed-rate without waiting for a federal handout.

Ron Stead

Call me today at 540-539-1200 or e-mail at rstead@shentel.net

Find my website at http://www.ronsellsva.com/