Jeannine Aversa, an Economics Writer for the AP, recently wrote the following about the newly announced White House plans to help alleviate the mortgage problems many Americans are facing. It is worth your time:
WASHINGTON – Be ready to wait if you want to get information from a toll-free hot line about freezing the interest rate on your subprime mortgage.
Minutes after President Bush outlined a plan to help strapped homeowners, callers were told to have patience until a counselor could answer their questions and “devote as much time to you as necessary.”
But, once they do get through, homeowners may not find the answers they sought.
One caller to the hot line (1-888-995-HOPE) was told there would be “lots of hoops to jump through” to obtain the five-year freeze. The rate hold goes to the heart of the relief effort for people with subprime mortgages, which are loans offered to borrowers with tarnished credit or low incomes.
Even President Bush acknowledged the plan is “no perfect solution.” Treasury Secretary Henry Paulson said it was not a “silver bullet.”
Only a fraction of the homeowners who face huge jumps in their mortgage payments appear likely to be helped by the plan, negotiated by the Bush administration, to freeze the low introductory rates on their subprime loans for five years. After that, they could be in the same position again.
Homeowners dialing up their mortgage company to get their current rate frozen could be disappointed. The White House plan does not force mortgage companies to give eligible homeowners a break. It is voluntary.