I saw several post in GD today regarding the much talked about possibility of a mortgage (lender) bailout. I had posted this article in LBN last evening which covers some of what is expected to be involved.
I'll cross post it here for those who may be interested in reading it also.
Experts: Freeze on home-loan interest no cure-all
Source: Associated Press
WASHINGTON — If lenders temporarily freeze low introductory interest rates on home loans made to risky borrowers before they soar, it would be a modest fix for the country's fractured housing market.
The problems are so far-reaching, analysts say, that an emerging Bush administration-backed plan — nicknamed "teaser-freezer" by one economist — won't spare many borrowers, or bankers, from the pain of escalating foreclosures and defaults.
Edward Yardeni, an economist who runs Yardeni Research in Great Neck, N.Y., called the plan "better than doing nothing," but added that it is "not necessarily going to make a big dent in the foreclosure problem that's facing us" because thousands of borrowers still might not be able to make their monthly payments.
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The freezes would apply only for borrowers who are current on mortgage payments but unable to afford loans when they adjust to higher interest rates — and sometimes dramatically higher monthly payments. The Federal Deposit Insurance Corp. estimates that 1.1 million borrowers are in that situation.
More at link:
http://www.chron.com/disp/story.mpl/chronicle/5345861.htmlLBN discussion link:
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=102&topic_id=3086950&mesg_id=3086950