Bush Administration Works Out Deal on Housing Loans

President Bush is set to announce a deal to help some American homeowners who will be unable to pay their home loans next year. The agreement between banking regulators and lenders, to be announced Thursday, would freeze interest rates on certain “subprime” mortgages for five years.

Subprime loans go to borrowers with poor credit, and frequently featured low “introductory” interest rates. Lenders can raise those interest rates after a set period, boosting the monthly payment - and the odds the borrower will default.

About 100,000 subprime mortgages a month were scheduled to have their interest rates reset for the next couple of years.

Some conservatives, who usually side with the Republican Bush Administration, criticized the agreement as an intrusion into free markets.

A leading candidate for the Democratic Presidential nomination, Senator Hillary Clinton, said the deal is a good idea, but does not offer enough help.

by VOA News

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