The recent President Bush plan unveiled to help subprime mortgage holders is criticized for not doing enough. The thousands of subprime borrowers eligible for the rate freeze are still being “punished” for reckless behavior in the past. But the punishment is just not by as much as they would if their adjustable-rate mortgages were allowed to move to unaffordable levels.

Subprime borrowers had higher rates to begin with and will still pay more than those who took out more conventional mortgages. Estimates vary on how many borrowers would be eligible for the freeze from around 150,000 to 240,000. Some 2 million subprime borrowers have ARMs that will reset to higher levels in 2008 and 2009.

To qualify for assistance from their lien holders, backed by the Federal government, those borrowers have to be current on their loans and lenders have to determine that the owner can’t refinance or afford an adjustment. The freeze will only affect those whose payments would increase by more than 10 percent with an adjustment.

click here for article

For more information on this and other real estate matters, your first source for Palm Beach real estate should be licensed agent and long-time resident Caesar Parisi.

search for : , , , ,