Bush announces 'limited' steps on loan crunch
By Noelle Knox, USA TODAY
President Bush announced a series of "limited" steps Friday designed to help homeowners struggling to pay their mortgages, expanding the role of the Federal Housing Administration and proposing a temporary change in tax law to prevent people from being penalized when they refinance risky "subprime" adjustable-rate mortgages.
The government's role in the ongoing subprime loan crunch is "limited," Bush warned at a Rose Garden appearance, and he said recent problems in the subprime market "are modest in relationship to the size of the economy."
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But for families facing drastic increases in mortgage payments because ARMs had been adjusted upward by lenders, "this problem doesn't seem modest at all," he said.
Under Bush's proposal, an estimated 80,000 homeowners with bruised credit and subprime ARMs they can no longer afford will be able to refinance loans, which the Federal Housing Administration (FHA) would insure.
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source : http://www.usatoday.com/money/economy/housing/2007-08-31-bush-mortgage_N.htm
