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July 24, 2008 10:55:51 PM CDT

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Bush to Offer Mortgage Freeze

Posted Dec 5, 07 1:07 PM CST in Politics,  Business 

(Newser) – President Bush will detail tomorrow the Treasury Department's plan to hold interest rates steady for subprime borrowers at risk of defaulting on their mortgages when rates rise, Reuters reports. The plan, negotiated with mortgages lenders and investors, would freeze for five years adjustable loans due to jump to higher rates between Jan. 1, 2008, and summer 2010.

The deal would most benefit homeowners who are reasonable credit risks but couldn't afford a higher payment; borrowers who haven't kept up as well with payments could also qualify under certain conditions. “Fixing the reset period is an important action,” one professor tells Bloomberg. “Now the question is what additional steps are required to keep people in their homes.”

Sources Reuters, Bloomberg

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Treasury Secretary Henry Paulson gestures during an address before the Asia Society on US-China economics, Wednesday, Dec. 5, 2007, in Washington. President Bush is set to announce tomorrow the details...   (Associated Press)
President Bush walks in a light snow toward Air Force One at Andrews Air Force Base, Md., to travel to Omaha, Neb., Wednesday, Dec. 5, 2007. (AP Photo/Charles Dharapak)   (Associated Press)
President Bush listens to a reporter's question during his news conference, Tuesday, Dec. 4, 2007, in the Brady Press Room of the White House in Washington. (AP Photo/Ron Edmonds)   (Associated Press)
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George W. Bush  • subprime mortgages  • Henry Paulson  • borrowers  • Treasury Department


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