FHA Book

Subprime Plan Falls Short

The new subprime freeze plan announced today by Bush and Paulson will aid up to 1.2 million homeowners, but not the ones who are already feeling the pain of resetting arms. According to CNN.com:

But the freeze is limited. It excludes anyone more than 30 days late at the time the mortgage would be modified or anyone who has been more than 60 days late at any time within the previous 12 months.

It also only covers borrowers with adjustable rate mortgages (ARMs) resetting beginning in 2008 and leaves out any who are judged capable of continuing to make mortgage payments at the higher reset rates.

I think this is a case of too little, too late.