The White House and members of the mortgage industry have ironed out a deal that will freeze interest rates for certain subprime loans for five years according to multiple media reports. A joint announcement by President Bush, Treasury Secretary Henry Paulson, Housing and Urban Development (HUD) Secretary Alphonso Jackson, and members of the HOPE NOW alliance is expected to come on Thursday afternoon.
The Bush-sanctioned coalition HOPE NOW, a group of mortgage industry officials charged with the task of creating a solution for the estimated two million households that face subprime mortgages scheduled to reset from lower introductory rates to higher rates, has been working closely with officials from the Treasury Department and HUD.
Earlier this week, Paulson announced some of the details of the subprime relief package that HOPE NOW and the Bush administration had hammered out. The collaborative effort will focus on increasing efforts to reach able homeowners who are struggling with their mortgages, working to increase the availability of affordable mortgage solutions for borrowers, and developing a systematic means of efficiently moving able homeowners into sustainable mortgages.