December 7, 2007
Mortgage Bailout is Big Buzz
The Bush Administration's plan to bail out borrowers who can't afford the reset interest rates on their subprime adjustable-rate mortgages has triggered a massive amount of buzz and not just within the Beltway or the mortgage industry. The man on the street, in the person of my friendly neighborhood dry cleaner, was not only aware of the plan yesterday afternoon, but was also quite outspoken about the obvious inequities of artificially low interest rates for people who borrowed money with too little income or an inadequate down payment to handle the risk. "When we went to borrow the money years ago," he declared, "the bank wouldn't even talk to us if we didn't have 20 percent for a down payment!"