Interest rate freeze harms more than it helps

Marcie Geffner - Inman News
U.S. Treasury Secretary Henry Paulson has defended the Bush Administration's plan for lenders and loan servicers to freeze monthly mortgage payments for selected homeowners who aren't able to afford the reset interest rates on their adjustable-rate mortgages and said the plan may be expanded to include prime as well as subprime borrowers. His defense comes as no surprise not only because he helped to broker the deal, but also because the plan is more about politics and governance than actual aid for homeowners. Indeed, the current plan, which was announced in early December, seems designed to benefit a relatively small group of people at the expense of both their neighbors and the broader economy that the plan is supposed to protect.

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