This is from Vaughn, who found it on Blacklisted News, who found it on Cryptogon, who found it on the Wall Street Journal (whew, did I miss anyone?). It’s also an “I told you so” when I recently shared that the State and the Feds would step in to keep debtors in line:
The Bush administration and major financial institutions are close to agreeing on a plan that would temporarily freeze interest rates on certain troubled subprime home loans, according to people familiar with the negotiations.
An accord could reassure investors and strapped homeowners, both of whom are anxious as interest rates on more than two million adjustable mortgages are scheduled to jump over the next two years. It could also give a boost to the Bush administration, which is facing criticism for inaction amid the recent housing turmoil.
The plan is being negotiated between regulators including the Treasury Department and a coalition of mortgage-related companies including Citigroup Inc., Wells Fargo & Co., Washington Mutual Inc. and Countrywide Financial Corp. People familiar with the talks say the individual members have agreed to follow any agreement reached by the coalition, which is called the Hope Now Alliance. U.S. Government, Banks Near a Plan to Freeze Subprime Rates
My earlier point was that “debt forgiveness” would not happen is demonstrated here. There are people who are wrongly running up debt in hope that collapse will “free” them. This is a dangerous game, one which you may not win.
I do not know if this will “work” to prop up the troubled economy or keep homeowners in their homes. Seems like most things the Feds try backfire anyway, so go figure.