Given this plan to freeze mortgage interest rates on borrowers in the sub-prime market with adjustable rate mortgages, I have to ask what the government will do for me about my mortgage.

President Bush will announce this afternoon an agreement with major mortgage firms to freeze interest rates for five years for financially troubled homeowners -- a plan advocates say will help forestall a major foreclosure crisis but some conservatives say amounts to a bailout of people who made bad financial decisions.

The plan would apply to homeowners who got adjustable-rate subprime mortgages between Jan. 1, 2005, and July 31 of this year and are facing a sharp jump in their rates before July 31, 2010. It would also offer to put them on a fast track to refinance their mortgages through lenders or through state and local housing authorities, according to several people briefed on the matter who spoke on condition of anonymity because the deal has not been officially announced.

yeah, but what about the rest of us. You know, the folks referred to in this paragraph.

On Capitol Hill yesterday, some Republican lawmakers and their aides expressed concern that the plan would anger homeowners and others who stayed out of the subprime mortgage mess.

I bought my house in 2001, choosing a higher interest rate for a fixed-rate lone rather than one of the gimmick loans with adjustable rates or interest-only payments. In other words, i was a responsible consumer, a responsible borrower. Why should my mortgage rate stay fixed where it has been for the last six years when a bunch of folks who got absurdly low rates for bigger loans than they could afford reap the benefit of a government bail-out by being allowed to keep that same absurdly low rate.

And make no mistake, this is a government bail-out, because the cost to the lenders in lost profits will be a tax write-off for those lenders. in other words, my taxes will go to subsidize the "generosity" of irresponsible and predatory lenders in showing mercy to the irresponsible borrowers who will see their interest rates frozen at their absurdly low teaser rates.

But I'll tell you what -- I'll support this plan under a couple of conditions.

First, make the loss to the lenders non-deductible on their taxes.

Second, count the savings to the irresponsible borrowers as income to be taxed by the government.

And if you are not willing to do either of those, roll back the mortgage interest rates of all of us responsible folks by a couple of points. After all, don't responsible borrowers deserve a little mortgage relief, too?

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Posted by: Greg at 10:53 PM | Comments (3) | Add Comment
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