Moratorium on Mortgage Rates Will Help Some People...

Word is out that there's the Bush administration has worked out an agreement with lenders to temporarily freeze mortgage rates for some homeowners, so that their mortgage payments won't adjust upward. According to one person familiar with the plan, the moratorium would "apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010." This will be of great help to people who have been able to make payments thus far but are facing a sudden increase of as much as 30% per month. The idea is to keep more people from going into foreclosure, so even though it won't help those already in danger of losing their homes, it should ease some of the pressure on real estate by keeping more short sales and repo's off the market.

The good news is that Treasury Sec. Paulson finally admits that the massive number of homeowners falling behind can no longer be dealt with as individual cases but must be recognized as a nationwide trend. Unfortunately, it's too little and too late for a lot of people.

The article ends with a gloomy outlook of impending recession, which has everything to do with consumer sentiment at the moment. A poll last month indicated that 40% believe that a recession is imminent. If that many people feel this way, it's no wonder that few are buying homes right now when so many need to sell.

AP article on Bush admin plan to freeze mortgage rates