The agreement contains numerous limitations that would exclude many — if not most — subprime borrowers. It would apply to loans taken out between Jan. 1, 2005, and July 30, 2007, and scheduled to rise in 2008 and 2009. It would exclude those who are delinquent on their payments — about 22 percent of all subprime borrowers, according to First American LoanPerformance, an industry research firm.
Among those sure to be disappointed are borrowers whose introductory rates expire before Jan. 1. About $57 billion in subprime loans were scheduled to be reset at higher rates in the final three months of this year, according to estimates by First American LoanPerformance.
Mortgage companies could also exclude borrowers who they conclude are making enough money to afford higher monthly payments. Barclays Capital — extrapolating from a similar program recently unveiled in California — estimates that only about 12 percent of all subprime borrowers, or 240,000 homeowners, would get relief.
I guess this is an issue where I get pulled back from the left towards the middle. I just can't see a reason to bail out people from these bad loans for much longer than the President is advertising. The Dem Candidates are talking in terms of 7-year bail outs and funds to help people pay mortgages. I'm all for social services, but that's over the line. Go after the aggressive lenders, shut down the subprime lending pipeline, and put the people in homes they can actually afford sooner rather than later. The choice isn't between the house they're in now and the street...just a cheaper house.
