Experts see Bush "teaser-freezer" mortgage fix as a bandage that won't stop many foreclosures

Experts see Bush mortgage fix as a bandage
Freezing adjustable rates won’t stop many foreclosures, they say

Sun., Dec. 2, 2007

WASHINGTON - If lenders temporarily freeze low introductory interest rates on home loans made to risky borrowers before they soar, it would be a modest fix for the country's fractured housing market.

The problems are so far-reaching, analysts say, that an emerging Bush administration-backed plan — nicknamed "teaser-freezer" by one economist — won't spare many borrowers, or bankers, from the pain of escalating foreclosures and defaults.

Edward Yardeni, an economist who runs Yardeni Research in Great Neck, N.Y., called the plan "better than doing nothing," but added that it is "not necessarily going to make a big dent in the foreclosure problem that's facing us" because thousands of borrowers still might not be able to make their monthly payments.

As a result, the plan, which could be announced as soon as this week, is unlikely to quell worries that the housing market's ongoing problems will drag the economy into a recession.

http://www.msnbc.msn.com/id/22068498/

Any loan based on an adjustable rate is going to go up when the Fed starts raising the rates again.

What needs to happen is not a freeze, but an active program that builds 30 year fixed loans at a similar interest rate to the one that the mortgage was bought with.

The banks won't get all that extra profit, but it will reduce the chances of a lot of foreclosures as payments will now be fixed for the life of the loan.

The bailout process will need to decide what is more important, the higher interest payments flowing into the CDOs while foreclosures increase, or solidifying the mortgage borrowers.

it allows for people with lots of money to scoop things up for very little money. You literally may soon be living in Nike Town or Nissan Village.

Yeaaaahhh, that's the ticket....

It's not even subtle.