This will probably be the best way to fix the credit fiasco. I can't say I feel too sorry for the credit companies for coming up with these subversive loans, and I can't say I feel too sorry for the consumer who doesn't subscribe to the "due diligence" thingy. This way it kind of splits the pain down the middle. The credit companies have to take the problem on for a few extra years, by when the homeowners have to figure out a way to get their act together or walk into the blast furnace. I would recommend using the five years wisely. I hope the five years just means that the homeowner has five years from the start of the loan. This would spread the refinancings out in time, otherwise there will be a rash of refinancings done in exactly five years from now, and for some reasons I trust the banks to be no more mature or honest about this than I do the contributors to the latest NIE on Iran.The Bush administration has hammered out an agreement to freeze interest rates for certain subprime mortgages for five years to combat a soaring tide of foreclosures, congressional aides said Wednesday.
The aides, who spoke on condition of anonymity because the details have not yet been released, said the five-year moratorium represented a compromise between desires by banking regulators for a longer time frame of up to seven years and mortgage industry arguments that the freeze should last only one or two years.