President Bush wins agreement, help for financially troubled homeowners

Bush wins agreement to freeze mortgages
Washington Post (12/06/07) P. A1; Cho, David; Irwin, Neil

Major mortgage lenders have agreed to lock in interest rates for five years on loans made to financially troubled homeowners who obtained adjustable-rate subprime mortgages between Jan. 1, 2005, and July 31, 2007. The deal with the Bush administration represents a compromise between mortgage firms and banks that wanted to freeze rates for one or two years and banking regulators who wanted seven years.

Mortgage lenders such as Countrywide Financial, big banks such as Citigroup, and nonprofit groups as well as Republicans and Democrats all support the agreement. The deal has the potential to head off a major foreclosure crisis, advocates say, considering the millions of borrowers facing a sharp increase in rates before July 31, 2010.