President Bush will announce this afternoon an agreement with major mortgage firms to freeze interest rates for five years for financially troubled homeowners -- a plan advocates say will help forestall a major foreclosure crisis but some conservatives say amounts to a bailout of people who made bad financial decisions.
The plan would apply to homeowners who got adjustable-rate subprime mortgages between Jan. 1, 2005, and July 31 of this year and are facing a sharp jump in their rates before July 31, 2010. It would also offer to put them on a fast track to refinance their mortgages through lenders or through state and local housing authorities, according to several people briefed on the matter who spoke on condition of anonymity because the deal has not been officially announced.
Eligible homeowners are those with enough income to pay their mortgages at lower rates but not so wealthy that they could afford the increase in monthly payments. The plan would be offered only to people who live in their homes, an effort to exclude real estate investors and speculators.
On Capitol Hill yesterday, some Republican lawmakers and their aides expressed concern that the plan would anger homeowners and others who stayed out of the subprime mortgage mess.
Darren McKinney, 48, a renter in the District, said he has been waiting for housing prices to fall so he can buy a condo without resorting to a dubious loan. He turned down an opportunity to buy his 600-square-foot apartment for $310,000 in late 2004 because he thought it was "absurdly overpriced."
Now the government is rewarding people who made irresponsible decisions and bought homes beyond their means, he said.
washingtonpost.com - nation, world, technology and Washington area news and headlines
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This kida of bullsiht burns me up.
Greedy people, living beyond their means bailed out by the government, again.
What kind of message does this send to every American?
If enough people are greedy morons, no matter what type of mortgage contract you've signed, your glutoney will be rewarded with another bailout. You'll be relieved of your stupidity.
There is precious little incentive anymore for upstanding Americans, living like Boy Scouts, to be responsible, modest informed homeowners that live within their means.
What ever happend to free markets? Blaze your own trail, determine your own destiny. Let the chips fall where they may?
Open the floodgates, free money for all who've been suckered in.
Sorry to those who bought a house a few hundred sq feet smaller, or in a bit shabbier neighborhood -- to secure a reasonable mortgage -- you're not stupid enough to get any handouts.
