Freezing Some Mortage Rates

There's word of a deal to freeze some mortgage rates.

According to congressional aides, the Bush administration has worked out an agreement with the mortgage industry. Interest rates for certain sub-prime mortgages would be frozen for five years, in an effort to deal with a rising number of foreclosures.

The sources say it's a compromise, between banking regulators who wanted a longer time frame of as much as seven years, and industry arguments that the freeze should just last a year or two.

According to one person familiar with the matter, the frozen rates would apply to borrowers with loans made from the start of 2005 through July 30th of this year, with rates that are scheduled to rise between the first of next month and July of 2010.

President Bush is supposed to speak about the agreement Thursday at the White House.

The plan is supposed to help homeowners who are making payments on time at the lower introductory mortgage rates, but who can't afford a higher adjusted rate.


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