President’s Plan to Freeze ARMs for 5 Years

Today it was leaked that the Bush Administration has hammered out a deal in which ARMs could be frozen for five years to help the economy recover from the subprime mess. The agreement was a compromise between banking regulators who wanted 7 years and the mortgage industry who wanted 1-2 years. Ultimately, the detail have yet to be released but here are a hint: “the rate-freeze plan would apply to borrowers with loans made at the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010.”

More in this My Way article but the only salient detail released was what I wrote above..