President Bush announced a plan today that will help homeowners struggling with adjustable-rate mortgages hold onto their homes. Interest rates on 1.5 million mortgages are expected to "reset" upward over the next year. "We have got to do something drastic, and we have to do something quickly," said Rep. Elton Gallegly (R-CA). "I don't like the government getting involved in the private sector, but we have potential problems we are already seeing come to pass." The plan, which is the product of an agreement between loan servicers and investors holding mortgage debt, will freeze the introductory "teaser" rate for certain borrowers for five years.
Some of our prior post on the subprime mortgage bust were: New York Attorney General Looking Into Subprime Mortgages, 3 Things You Should Know if Facing Foreclose, Fed Cuts .25% From Interest Rates To Help Housing Market, Home Mortgage Rates Actually HIGHER After Fed Rate Cut!, Worst Conditions Ever Seen by the Modern Mortgage Industry, #1 Cause of San Diego Housing Value Decline, Mortgage Delinquencies Spreading Beyond Subprime, U.S. Top 10 Lender, American Home Mortgage Enters Bankruptcy, Mortgage Bubble Meltdown, Stock Market tumbles 146 points . . . The Perfect Bull Trap on Sub-Prime Woes, San Diego Real Estate … the Worst is Yet to Come, Largest US mortgage lender Takes a Big Foreclosure Hit, Quarter-million Homes Forclosed in 1st. Half of 2007, Housing Bubble … Investors Opinion, Bond Interest Rates Move Up On Subprime Loan Problems, Housing Drop = Increasing Financial Distress, B of A — Current Foreclosures, Just Tip of Iceberg, Drop in Housing Values Could be the Factor that Leads Us Into Recession, Study Says 2.2 Million Borrowers Face Foreclosure on Subprime Loans, Subprime Home Mortgage Lenders in Big Trouble, Home foreclosures surge, WaMu Commits up to $2 Billion in Assistance to Help Subprime Borrowers, One to Two Million to Loose Homes to Foreclosure, Subprime Loan Implosion, Home Mortgage Trouble Ahead?, Real Estate Home Value Troubles Ahead!, Home Mortgage Late Payments Increase, 2.2 million American households will lose their homes