They’re not talking about locking at 4.5%. They said in the WSJ yesterday that the loans they’re considering would lock at between 7-9% instead of adjusting to 9-11%.
but then this would be purely for show! the very reason for these subprime loans was because normal folks can’t afford to buy homes with normal rates of 7-9%. but they could be squeezed into a home by dropping that rate to 4.5%.
by creating that ceiling of 7-9%, vast majority of folks would still foreclose away.
I actually thought if this thing goes thru the decline would slow down a bit. if this 7-9% thing is true, then the show will go on without any disruptions.
