Thursday, December 6, 2007
The Bush administration's agreement with the mortgage industry will allow interest rates to be frozen on loans to certain subprime borrowers.
How it will help: Interest rates on the loans will be frozen for five years. Borrowers will also have the option of refinancing their loans through their lenders or through state or local housing authorities.
Whom it will help: Borrowers who took out subprime mortgages between Jan. 1, 2005 and July 31, 2007, who are living in the homes they purchased and whose loans are scheduled to reset to higher rates within the next three years. Homeowners must be unable to afford their payments at a higher reset rate, but able to afford them at a lower rate.
Whom it won't help: The plan does not provide aid for real estate speculators or for borrowers who took out subprime loans prior to 2005 or after July 31, 2007.
SOURCE: Washington Post reporting