And so it looks as though it will actually happen.
U.S. Treasury Secretary Henry Paulson says he forsees an agreement between many of the nation's largest mortgage servicers
and the federal government within the week that would allow borrowers with steady incomes and solid
payment histories to "lock" the introductory ARM rates they received for up to five years.
"The number of subprime mortgage resets is going to increase dramatically next year, and we need to make sure the capacity is there to handle it," Paulson said in a speech at a housing conference in Washington.
Terms of the negotiations are unknown to the public at this time but economists are speculating that rates
would be locked for anywhere from two to five years.
Sheila Bair, chairwoman of the FDIC, told reporters "it's a complicated process and took some time, but I think we're very close now," she said. She favors extending introductory rates for at least five years.
Housing and Urban Development Secretary Alphonso Jackson said that the Bush administration expects to make an announcement Thursday. Paulson said, "I am optimistic that we are going to have something to announce by the end of the week."
Some information contained herein provided courtesy of Bloomberg News Service via the Detroit Free Press.