Bush Administration Solution To Subprime Mortgage Mess? Don’t Count On It

I have read that the new Bush administration solution to the subprime mortgage mess is to set new guidelines for mortgage lenders to freeze rates on a very small portion of their adjustable rate loans made after 2005, and only for those loans where the payments are current. This is a very small amount of the loans out there and won’t help any of my clients. Oh, and by the way, it’s all voluntary. That’s what I have read!

The solution is to ask the lenders to be nice and make a little less money on their loans for now. This ridiculous “solution” is all talk. What is not being widely reported, but what I suspect is really behind this, is that the administration is trying to deflect bad PR from the current foreclosure crisis. They have to look like they are doing something to help. Especially at this time of year during the holidays. But this is all smoke and mirrors. The emperor’s new clothes. What happens if lenders don’t want to comply – voluntarily? It is also very likely that there is a secret agenda here – it may be that they want to use this latest “solution” as a way to stop the current efforts to revise the Bankrupcy Code to permit modifications of residential home mortgages. After all, if the lenders have already solved the crisis with this voluntary “solution”, we won’t need to modify their rights in Chapter 13. Get the picture?