President Bush helps homeowners affected by sub-prime crisis
It is expected that President George W. Bush will outline a proposal to keep mortgage rates on hold for 5 years for American homeowners affected by the sub-prime mortgage crisis.
Sources say the freeze will be applied to mortgages made between 1 January 2005 and July 31 2007. It is believed that half a million borrowers risk losing their homes.
The Federal Reserve said approximately 1.8 million homeowners who took out loans with discount rates will face increased mortgage repayments next year. Many believe that a temporary freeze should be applied to mortgage rates in order to make it easier for those affected by the credit squeeze so they can meet their mortgage payments and keep their homes.
However, many say such measures would bail out homeowners who made took it upon themselves to sign up for these delays.
This could, in effect, delay the necessary correction that property prices must undergo to resolve the fundamental problem.
A statement is expected later today.