This should help some people that the FHA Secure loans don's

[firstsource]

Bush Administration Puts the Freeze on Subprime ARMs

After weeks of meetings between Treasury Department officials, mortgage lenders, and Wall Street firms, the Bush administration today announced that an agreement has been made to "freeze" interest rates for up to five years on certain subprime adjustable rate mortgages.

According to the New York Times, the goal of the President's plan is to convert as many subprime ARMs as possible into "more sustainable loans." However, the freeze applies only to borrowers who:

* Took out their loan between January 2005 and July 2007 and whose rates are set to increase between January of 2008 and July of 2010; and

* Have less than 3% equity in their homes; and

* Are current on their payments (or no more than 60 days behind); and

* Are able to handle their current lower rate, but will not be to handle a higher payment.

Analysts estimate that the plan will help between 240,000 to 250,000 borrowers.

The freeze is a voluntary agreement on the part of lenders, so no legislation is required for this plan. Analysts note, however, that congressional approval would be necessary in order to increase current FHA loan limits.

[merkurfan]

Bush Administration Puts the Freeze on Subprime ARMs

After weeks of meetings between Treasury Department officials, mortgage lenders, and Wall Street firms, the Bush administration today announced that an agreement has been made to "freeze" interest rates for up to five years on certain subprime adjustable rate mortgages.

According to the New York Times, the goal of the President's plan is to convert as many subprime ARMs as possible into "more sustainable loans." However, the freeze applies only to borrowers who:

* Took out their loan between January 2005 and July 2007 and whose rates are set to increase between January of 2008 and July of 2010; and

* Have less than 3% equity in their homes; and

* Are current on their payments (or no more than 60 days behind); and

* Are able to handle their current lower rate, but will not be to handle a higher payment.

Analysts estimate that the plan will help between 240,000 to 250,000 borrowers.

The freeze is a voluntary agreement on the part of lenders, so no legislation is required for this plan. Analysts note, however, that congressional approval would be necessary in order to increase current FHA loan limits.

insane... thats all I can say. who is to say they can handle their current rate? if they are 30-60 days late, the answer is obvious. THEY CAN'T! Those that are current, how are they doing it? are they robbing peter (a credit card) to pay paul (the mortgage)

What about the investors that invested in these loans expecting the returns? They just got shafted.

[firstsource]

One interesting thing is that if someone is 30+ days late, and they can prove that it is because their ARM adjusted, then they probably qualify for an FHA Secure loan.

I think that it is probably in the investors best interest, as if the rate goes up and the people can not pay the new payment, and then end up in a foreclosure situation, the investor REALLY has a problem. No income stream for a while-until the home sells.

Then if a lot of homes go into foreclosure and that depresses the market for homes in that area-the investor ends up with more of a problem.

The investors should have known something was up on these sub-prime mortgage pools they bought into. They were paying a much higher yield than the ones that were based on conforming & govenment loans, there must have been a reason.

A big question I have is how the two, very respected, bond rating agencies could have dropped the ball on all of those mortgage backed securities/pools. They gave the sub-prime ones the same rating that they gave the conforming ones.

Charles