Rest easy, America! Your President is on your side! You say you got yourself in trouble back when mortgage rates were so darn low that you bought a twenty-seven acre estate in the swamps of New Jersey, complete with revolving hot tub and mirrored ceilings - in the garage? Well, stop your worrying, bubby, because help is on the way. The government's plan (your government, after all), worked out with private lenders, would allow some borrowers with interest rates that are slated to rise sharply in the coming months to either refinance the loan or have their current rate frozen for five years.
Okay, I should come clean here: I had an adjustable rate mortgage. The past tense of said mortgage is what gives me the strength to write these words now. A few years back, our financial advisor noticed this and made a face. It was a face of a financial advisor who wanted to give my wife and I advice but was trying to frame his suggestion in a polite way. "And just why did you decide upon an adjustable rate instead of fixed?" he asked.
My wife and I sat placidly and made vague attempts to sound as if we knew what we were talking about. Adjustable rates mean that they can go down if the rates continue to drop, right?
"What if they go up?"
And thus the conversation ended as we locked in a very pleasant and low rate for ourselves and ever since that day we have looked askance at those with adjustable rate mortgages as if they were compulsive gamblers. Now the Federal Pixies in charge of such things are looking to set a certain group of homeowners up with what amounts to an extension on their credit. It puts me in mind of the ATMs you find in the corner of most casinos. After you lose your shirt, why not buy yourself a new one so we can have that one too?
What's the impact of all of this? Well, it means that foreclosures will taper off for a while - at least until Pinhead can work out the refinance on his ranch down in Crawford.