The treasury is set to unveil plans to help with the current mortgage crisis by freezing interest rates at the lower “starter” rates for 5 years on some loans. Adjustable rate loans are about to reset, and many borrowers are about to find out that they can no longer afford the payments on their home. To help with this impending doom, President Bush is expected to announce the plan today.
With so many borrowers owing more on their home than it is worth, there is a huge risk of foreclosures. Adding to this burden with a re-adjusted ARM is enough to send many over the edge.