It was announced yesterday that the Bush administration has worked out an agreement with the banking industry to freeze industry rates for certain subprime mortgages for the next five years.
Details have not been released, but it is believed the plan would apply to borrowers with loans made from 2005 to July 30, 2007, with rates expected to rise between Jan. 1, 2008 and July 31, 2010. The plan would only apply to owner-occupied homes, leaving out real estate speculators who have over extended.
It is estimated that as many as 2 million subprime mortgages are looming to reset from low introductory rates to higher rates that could increase monthly payments by as much as 30 percent.
Through October 2007 there were over 1.8 million foreclosure filings across the U.S., compared to 1.3 million in all of 2006.
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