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Schwarzenegger announces deal to FREEZE adjustable rates for state's "highest-risk borrowers"


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2007 Nov 20, 11:40am   27,109 views  129 comments

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Governator Freeze

Sacramento Bee: "California lenders agree to freeze rates"

In an unprecedented move designed to save thousands of California homeowners from foreclosure, Gov. Arnold Schwarzenegger announced a deal Tuesday with four mortgage lenders to freeze adjustable interest rates for some of the state's highest-risk borrowers.

The state's agreement with Countrywide Financial Corp., GMAC Mortgage, Litton Loan Servicing and HomeEq Servicing covers more than 25 percent of California's subprime mortgage loans, which generally involve homebuyers with weak credit and require periodic increases in payments after initial low-teaser rates.

The deal brokered by Schwarzenegger requires lenders to freeze low interest rates for subprime homeowners who reside in their property.

"To lose your home, as probably everyone knows, through a foreclosure is an emotional crash and it sometimes takes years to recuperate from," Schwarzenegger said. "But we don't have to sit idly by to watch the American Dream become the American Nightmare."

Moral hazards, anyone? Show of hands on how long before all struggling ARM borrowers stop repaying their mortgages so they can get "rescued" by the state government as well? Oh, and how about the millions of other subprime/Alt-A/option-ARM/I-O/Jumbo-prime loans that are no longer on the books of CFC, GMAC, Litton & HomeEq? Is the Governator also going to negotiate with Mr. Hedge Fund, Mr. Pension Fund and Mr. Foreign Central Bank, who are now holding all that toxic waste in MBS/CDOs?

O, what a tangled web we weave. This is getting more "interesting" (in the Chinese sense) all the time.

Discuss, enjoy...
HARM

#housing

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129   Logistics lady   2008 Nov 25, 9:30am  

My husband was a mortgage broker for 2 years. We can't lump everyone into the same "mold" and stereotype the whole industry. Before my husband had his own business as a broker, he worked for one of the bigger companies doing mortgages. The whole reason he got into doing it for himself is that he hated the way most lenders "talk over people's heads" so that they don't really understand what they're getting into and put stuff into the contract that they know nothing about because they don't know how to read it. He wanted to be more than that - real to the customer. He would show up to do signings and meet customers wearing shorts, a polo shirt, and sandals, because he didn't want them to see him as another one of those stuffy salesmen. He got alot of business that way and made some good money, yes, but more importantly, he helped many people out of very bad financial situations and into good ones that would help them get out of debt. If you do it for the right reasons, it's not so bad. Don't lump them all together into one stereotype - it's just not fair to all the ones that are doing the right thing. Just like stereotyping Catholic priests as all of them being pedophiles - its just not true.

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