Bush to Offer Mortgage Freeze

Plan would help homeowners facing rate increases
By Kevin Spak,  Newser Staff
Posted Dec 5, 2007 1:07 PM CST
Bush to Offer Mortgage Freeze
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 of a deal brokered by the Treasury Department to freeze subprime mortgage rates for five years. (AP...   (Associated Press)

(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.” (Read more George W. Bush stories.)

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