NPR: Bush Plan Would Freeze Some Subprime Loans

Bush Plan Would Freeze Some Subprime Loans

The Bush administration and financial institutions have agreed to a five-year freeze on interest rates for certain Americans who are facing possible foreclosure because of the subprime lending crisis. NPR reports that more than 2 million people are "projected to face foreclosure next year as payments on their adjustable-rate mortgages ratchet up to unaffordable levels - in some cases more than 12 percent higher than their current payments."

But as Bob Moon of Marketplace points out on Day to Day, this plan won't help everybody in trouble. It could mean that two people who live side-by-side, and got their mortgages at the same time, could pay different rates. Borrowers will have to be current on their mortgage payments, and the lender will take a look at their income to see if they really can't afford to have their payment level go up.

On Tuesday Democratic presidential candidates Hillary Clinton and John Edwards said the president wasn't doing enough to help the vast number of homeowners at risk of foreclosure and to fix the mortgage crisis that is roiling financial markets.

But an interesting counterpoint to today's announcement also came on Day to Day, from Andrew Gerber, a home owner with a fixed-interest rate, who is not happy about the President's announcement. "What about people like me ... who have made the right choice?," he asked. "Shouldn't we get a point or two off our mortgages?" How come the people who made the right choices get penalized, Gerber said, but the people who made the wrong choice get a handout?

Update: Whoops! CNN reports that people trying to find out if they qualify for the new mortgage relief plan were thrown for a temporary loop after President Bush gave out the wrong number for the "Hope Now Hotline." Anyone who dialed the number mentioned by the president called the Freedom Christian Academy, a Texas-based group that provides Christian education home schooling material.

Maybe the president got some papers from his faith-based initiatives plan mixed up with the mortgage relief plans. Hey, my desk is a mess, I can understand how it could happen.

The White House quickly released the proper number once the mistake was brought to their attention.

3:59 PM ET | 12- 6-2007 | permalink

Comments

I can taste your fear

It's going to lift you up and take you out of here

And the bone shall never heal, oh, how can I let you kneel?

Sent by Jody Sol | 8:24 PM ET | 12-06-2007

But an interesting counterpoint to today's announcement also came on Day to Day, from Andrew Gerber, a home owner with a fixed-interest rate, who is not happy about the President's announcement. "What about people like me ... who have made the right choice?," he asked. "Shouldn't we get a point or two off our mortgages?" How come the people who made the right choices get penalized, Gerber said, but the people who made the wrong choice get a handout?
----
Isn't that kind of whiny? Doesn't preventing a rash of foreclosures and auctions on his block benefit Gerber by propping up his property values?

Sent by Mae Brown | 5:13 PM ET | 12-09-2007

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