The Bush Administration has worked out a deal with lenders to freeze rates on adjustable loans for up to 5 years. This would apply to loans originated at the beginning of 2005 through July 2007.Â
http://news.yahoo.com/s/ap/20071205/ap_on_go_pr_wh/mortgage_crisis
Is this a smart move? Time will tell, and certainly this is the first real move the government has made to directly help homeowners. Certainly the people who got loans before 2005 will feel left out, but this will undoubtedly reduce the foreclosure rate. The bottom line of whether this improves the housing market will be dependent on whether it makes investor on Wall Street feel warm and fuzzy enough to start buying up pools of mortgage backed securities so lenders can start softening up on their loan guideliness.
