Bush Mortgage Plan Arrives

1.2M homes at risk in crisis could be saved, he says; critics charge it's not enough
By Jonas Oransky,  Newser Staff
Posted Dec 6, 2007 3:01 PM CST
A home is advertised for sale at a foreclosure auction in Pasadena, Calif. in this Aug. 14, 2007 file photo. Some 2 million homeowners hold $600 billion of subprime adjustable-rate mortgage loans, known...   (Associated Press)
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(Newser) – The White House today released its plan to help homeowners threatened by the subprime crisis, asserting 1.2 million could be helped—but only 240,000 of 2.2 million rate resets due next year are covered, CNN reports. The five-year interest rate freeze doesn’t apply to borrowers 30 days late at the time of reset or those 60 days late at any point in the past year.

The plan applies only to rate adjustments beginning in 2008, and excludes homeowners judged capable of paying the reset levels. Moody’s top economist was irked at the enforcement measures—“it depends on moral suasion”—and said, though laudable in its aims, the plan is “going to come up short.” That said, most parties said they were glad to see the administration taking action.