I have been reading with some interest the plan that President Bush plans to sign to help those who have audjustable rate mortgages that are becoming seemingly out of control. I am sure there is an underlying agenda for this...like to save our economy...but I applaud him for this "heartfelt" effort.
Here are some of the interesting things about the plan...
Who qualifies?
People with sub-prime mortgages who live IN the residence covered by the mortgage. The plan is designed to EXCLUDE investors who bought properties and hoped to financially gain from the surge in home prices of the past. Borrowers MUST be current with payments!
What is the time frame?
The loans had to be made between Jan. 1, 2005 and July 31, 2007 AND the loans must have rates that are going to reset between Jan 1, 2008 and July 31, 2010.
What happens?
Under the freeze the rates will remain at the lower introductory rate for a period of 5 years.
Economic Impact?
This plan will limit the number of mortgages that are going into default and keep down the number of homes being dumped onto an already glutted market. The plan will give homeowners a chance to refinance for better terms and the plan will allow many people to keep their current homes as long as action is taken during the freeze.
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