Quite frankly, I don’t think this will work out well. The whole problem startde due to subprime mess. According to BanK of America, many subprime borrowers defaulted on their home loan even before their loan reset.
Refer to the WSJ paper a few weekends back. Freezing the rates will only help a few borrowers. Since the dollar is depreciating, there is an upward pressure on inflation. The salaries aren’t rising as fast as the gas prices are.
This will suck up $$$ out of our wallets and subprime borrowers will likely be hit hard. To give FBs more $$$, congress is proposing an additional tax cut. But that won’t help either because subprime borrowers have a well known history of default and giving extra $$$ to them is like giving alms to them.
MY guess is that this patch is not the right patch.
