clock menu more-arrow no yes

Filed under:

Morning Mortgage Meltdown: Methadone Clinic Now Open

Georgie Porgie Pudding and Pie is rolling out a mortgage relief plan— or, as the Chron's Kathleen Pender calls it, a "methadone plan"— today, having reached an agreement with lenders to freeze interest rates for some not so lucky homeowners. Henry Paulson, our Treasury Secretary-at-arms, is also pushing for legislation that would allow municipalities to bail out their homeowners through the sale of tax exempt bonds. Inventing a very special game of four square to determine the financial future of homeowners, Bush and company have parsed subprime borrowers into four groups; only those who can maintain their mortgages at the current rate but would fail to do so should that rate rise— only they will be helped with a five year rate freeze. A cynic of our own heart, Pinder questions the terms and conditions of the plan: "Why help only one group of borrowers? ... Isn't that rewarding gamblers and penalizing the more prudent?" "Gotta pay to play" doesn't sound as sexy an adage as it once did.
· Kathleen Pender: How mortgage-rate freezes could go wrong [SF Gate]