Freezing Subprime Rates: Good, Bad Idea? What Do You Think?
Unless you were trapped under something heavy this morning, you’ve probably heard about the Treasury Dept.’s impending deal with major lenders to freeze interest rates on certain subprime loans.
This is all coming out of the “Hope Now” alliance, which was originally launched by Treasury Secretary Henry Paulson and designed to get lenders in better communication with borrowers. In the alliance: Countrywide, Wells Fargo, Washington Mutual, Citigroup and others.
So forget communication, now it’s a fix: save distressed borrowers by coming up with a plan to temporarily freeze those teaser rates, again, on certain loans. The details of how to determine who gets the freeze are still, TBD.
This is something along the lines of FDIC Chairman Sheila Bair’s proposal, which she posted on the blog a few days ago. That one garnered plenty of response, and I gather this news will garner even more, so we’re going to post as much as we can today. Write it in, the shorter the better, and we’ll try to get your opinion on the blog: email@example.com.
Questions? Comments? RealtyCheck@cnbc.com