2007-12-06T21:14:00.000-08:00

FLASH! FLASH! FLASH! FLASH! FLASH! FLASH! FLASH! FLASH! FLASH!
The Bush administration has come up with a plan to help strapped homeowners facing a daunting jump in their monthly mortgage payments. The proposal, reached in negotiations led by Treasury Secretary Henry Paulson with
the mortgage industry, would freeze introductory "teaser" rates on subprime mortgages, preventing them from resetting to higher rates for five years.
White House deputy press secretary Tony Fratto said it would help "potentially a little more than a million" people who can afford payments with their introductory rates, but not if they jump to higher rates. He said it was voluntary, and did not represent federal intrusion into the private market. President Bush, who was to announce the agreement after a meeting with industry leaders at the White House on Thursday, has stressed that the deal is not a bailout because no government money is involved.
The effort is aimed at stemming a threatened wave of foreclosures in coming years as 2 million subprime mortgages—loans provided to borrowers with spotty credit histories—reset from their introductory rates of around 7 percent to 8 percent to levels as high as 11 percent, adding hundreds of dollars to the typical monthly payment. The mortgage companies will offer to freeze the loans at the lower introductory rates as long as the borrowers did not miss any payments at the lower rate.

Under the administration plan, the rate freeze will apply to loans made at the start of 2005 through July 30 of this year and will cover loans that had been scheduled to rise to higher rates between Jan. 1, and July 31, 2010.

The plan represents an about-face for Paulson, who until recently had insisted the mortgage crisis could be handled on a case-by-case basis. However, he and other administration officials became convinced the tide of foreclosures threatened by the mortgage resets represented such a severe threat that a more sweeping approach was needed.
More information to come out later... LOOK for it HERE!!

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2007-11-12T18:39:00.000-08:00

If you have any questions about the content. If you have any questions about the tax year. If you have any comments about any of this, send it along. If any of the tax bloggers can answer the question they should feel free to do so. I will answer any questions that I can and will get answers to any others that I do not have an answer for. I do not have all the answers so bear with me if a question is not answered immediately.

Income Tax Year (2007)

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