Good morning: It appears likely that President Bush will sign into law a measure that will freeze homeowners' adjustable rate mortgage payments for 5 years. This is only if the rate was scheduled to adjust and the homeowner is current with their payments. So is this a good thing? Of course! The question is it too little too late?
I think so. It appears to me that the damage has already been done. With a record 1.8 million foreclosures this year (up from 1.3 million in 2006), the governments' measure will probably just stanch the flow. Plus, it doesn't help those who are behind on their payments. I'm not a betting man but would hazard to guess that a large percentage of those homes foreclosed were behind on their payments as well.
It's interesting that the governments' goal of having everyone buy a home came back to bite them. Now they're having to come up with bailout programs. My question is would the market have corrected itself without help. It usually does and I have to admit I'm an advocate of the free market.
If you're a homeowner with an ARM that is adjusting, this is potentially good news. Remember that you must be current on your payments. You may want to consider a refinance as well. Currently a 30 year fixed mortgage can be had for roughly 5.75% if your credit is good. Have a great day!
Paul
Paul McFadden
