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New Plan to freeze Mortgage rates floated
[link|http://biz.yahoo.com/ap/071205/mortgage_crisis.html|Yahoo]
The Bush administration has hammered out an agreement to freeze interest rates for certain subprime mortgages for five years to combat a soaring tide of foreclosures, congressional aides said Wednesday.

The aides, who spoke on condition of anonymity because the details have not yet been released, said the five-year moratorium represented a compromise between desires by banking regulators for a longer time frame of up to seven years and mortgage industry arguments that the freeze should last only one or two years.

It is a fairly narrowly crafted plans, only owner occupied and only if the loan was made in the last couple of years. So it isn't an obviously bad idea, but we shall have to see the final details. This is one case where there are a lot of devils in the details.

Personally, I'm split on the idea. On the one had it would be bad for the economy to let the market crash, on the other, it would be rewarding people that took out bad loans. And it would probably make it harder for people to buy homes in the future, since house prices would be propped up and loan values depressed.

The ones that where told that they where getting a fix rate mortgage and it was really a fixed introductory rate for x number of years is a separate problem. And that really requires those brokers and companies being tracked down and shut, not being let off the hook by mortgage rate deal.

Jay
New this isnt going to help. The owner who has only lived there
a few years is badly upside down on his note. It would be cheaper to walk away from the house and take the 7 year credit hit than push good money after bad. This pushes the loan where it belongs, onto the people who financed this mess.
thanx,
bill
Quantum materiae materietur marmota monax si marmota monax materiam possit materiari?
Any opinions expressed by me are mine alone, posted from my home computer, on my own time as a free american and do not reflect the opinions of any person or company that I have had professional relations with in the past 51 years. meep

reach me at [link|mailto:bill.oxley@cox.net|mailto:bill.oxley@cox.net]
New Won't prop up home prices too much
there is enough bank owned now to keep the prices down for a while.

Builder inventory is another thing keeping prices very low.

Ideally, any relief will come with certain baselines on loan qualification parameters...to keep this from happening again.
Too much of today's music is fashionable crap dressed as artistry.Adrian Belew
New I think it's a preemptive measure.
It doesn't do much except for a very narrow group. On the other hand, it prevents the Democrats from initiating more broad legislation and adding more Federal rules and how the mortgage business is done.

The problem is solved!

[image|/forums/images/warning.png|0|This is sarcasm...]
Alex

Nobody has a more sacred obligation to obey the law than those who make the law. -- Sophocles (496? - 406 BCE)
     Plan to freeze Mortgage rates floated - (JayMehaffey) - (3)
         this isnt going to help. The owner who has only lived there - (boxley)
         Won't prop up home prices too much - (bepatient)
         I think it's a preemptive measure. - (a6l6e6x)

Follow the gourd!
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