Awesome! I was scrambling trying to figure what avenues to take when my ARM resets this October 2008, but it looks like I may have lucked out for another 5yrs....btw this is only for owner occupied properties I believe....





"Congressional aides say the Bush administration has hammered out an agreement with industry to freeze interest rates for certain subprime mortgages for five years in an effort to combat a soaring tide of foreclosures.

These 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 as much as seven years and industry arguments that the freeze should only last one to two years.

Another person familiar with the matter said the rate-freeze plan would apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010.

The administration said that President Bush will speak on the agreement at the White House on Thursday and the Treasury Department announced that Treasury Secretrary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson would hold a joint news conference Thursday afternoon with officials of the mortgage industry.

Treasury also announced that there would be a technical briefing to explain more of the details of the proposal.

Paulson, who has been leading the effort to craft a plan, said on Monday that the program would only be available for owner-occupied homes -- as a way to make sure that the break is not granted to real estate speculators.

The plan emerged from talks between Paulson and other banking regulators and banks, mortgage investors and consumer groups trying to address an avalanche of foreclosures that are feared as an estimated 2 million subprime mortgages reset from lower introductory rates to higher rates.

The higher rates in many cases will boost monthly payments by as much as 30 percent, making it extremely difficult for many people to keep current with their loans.

The plan is aimed at homeowners who are making payments on time at lower introductory mortgage rates but cannot afford a higher adjusted rate.

Through October, there were about 1.8 million foreclosure filings nationwide, compared with about 1.3 million in all of 2006, according to Irvine, Calif-based RealtyTrac Inc. With home loan defaults still rising, the trend is expected to worsen next year."

 

so because folks who either did not read their terms, were too stupid to understand them or knowingly took a huge risk will get bailed out. There is no responsibility anymore.

Don't get me wrong I'm happy for you but it's just another example of the nobody being held accountable for their actions/decisions. I'm sure I'll get a lot of flack but I have a buddy at work who's in big trouble w/ this and I had to ask him if he actually read/understood what he got himself into. He tells me yes but was only thinking about the first 3-4 years or so.

My opinion of him has changed a bit needless to say.

"end of rant"

 

to have taken such a dive, when I had initially had taken out a loan. I worked in mortgages for yrs prior to purchasing, so I def knew what I was getting myself into. Either way regardless if this thing passes, I'll be fine financially. I don't necessarily think its a lack of responsibility at all...i see it more of a breath of fresh air for those who have been manipulated, knowing there is some light at the end of the tunnel after the real estate market has taken such a spill in the last yr. I worked with a lot of shady ppl in the mortgage business, and have seen first hand the bs that they feed their clients....in order for them to get sign a mortgage & get paid their commission. I doubt half those ppl who are in financial turmoil now as a result of this, even knew what an "ARM" really is.....for the simple fact they were misconstrued.

 

whats your rate now?

 

The rate is only part of the issue, the real problem is that people financed well over 90%, of a high value, with creative mortgages and little to no down payment. When the market drops those people get killed.

The scarier thought is how little most people save for the future.

 

I don't really like the idea that all of us will be burdened with the cost of bailing out these dumbasses, but I recognize the need. However, if you pulled equity out of your house and got into an ARM to buy an SUV or a big screen TV, you should fry.

Better, how about only helping first time buyers?

 

For those of us that did the research and opted for the 30 year fixed mortgage and didnt buy past our means and stayed responsible and conservative they should extend the lower interest rates too.

If the banks can bail out these people who didn't think their actions through, they can extend these discounted percentages to the rest of us.

The middle class is carrying all of these bail outs.

 

Freeze all the adjustable rate mortgages. For folks with fixed rate, just freeze property taxes and insurance costs for five years. I'd take that deal - better than nothing.

 

even as the market was leveling off.

I would love to see everyones rates lowered, but that defeats the purpose of fixed vs. adjustable mortgages and rewarding those with better credit who fit the financial model best. Those with an ARM took a risk, but now that risk is being removed.

Maybe Bush should bail me out of my stocks that crashed after 9-11? I took a risk and in turn a hard hit

 

Mine is capped to a max of 2% and given my rate is under 5%, it made total sense to do it this way.