Countrywide, GMAC, Litton, and HomeEq hold about a quarter of the subprime loans in the state. Together with Governor Schwarzenegger, lenders announced yesterday that they would allow some of those poor-credit borrowers to freeze interest rates at the initial, low levels rather than kick into the variable, higher rates . . . for a time. Perhaps until the market rights itself and refinancing becomes an option. Let's hold our collective breath; it could be a while. The qualifications: borrowers must live in their homes, have made timely payments to date, and prove they cannot afford payments once that higher interest rate kicks in. Perhaps that last factor should have been considered when these loans were entered into in the first place, a mere 3-5 years ago in most cases. We suppose it should somewhat mitigate the tide of foreclosures;some time to spread those out should benefit the lenders. And this does allow the truly responsible amongst subprime borrowers to scrimp, save, sell, or salvage whatever they're able. Again . . . let's hold our breath.
· Governor, 4 big lenders agree on plan to stall high mortgage rates [Chronicle]
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