The White House and major money merchants are cobbling together a scheme to temporarily freeze interest rates on select subprime mortgages to stave off further collapse in the banking system, and create a response from the Bush administration to criticism it's been sitting on its thumbs until now. *
I am particularly amused at the slightly oxymoronic--select sub-prime--phrase to describe these loans. One pundit has called them the financial equivalent of buying skim milk at cream prices. How apt. Either way, someone's been getting milked.
So the plan in the works is intended to reassure investors and anxious homeowners as loan rates on more than two million adjustable mortgages are slated for increases within the next 24-months.
Smoking the peace pipe are regulators in the Treasury Department and a coalition of mortgage-related companies including Citigroup Inc., Wells Fargo & Co., Washington Mutual Inc. and Countrywide Financial Corp. The Coalition is called the Hope Now Alliance, which is working to extend the lower "teaser" rate on home loans for families who would have trouble making payments once their mortgages increase. Or some kind of pipe.
What about the rest of us?
I know that's a little selfish, especially in this season of "peace on earth, goodwill to all men," but what about rest of you who, like me, have been faithfully paying our mortgage payments without fail since before the sub-slime meltdown. What’s in it for us?
It’s like getting a flyer in the mail from your cable company, offering ridiculous rates for new customers. Makes you feel like a chump for paying full rate, while your next door neighbor, who wasn’t sharp enough to get on your plan, is getting a break for coming late to the party.
Same deal with the cell phone people: They offer free phones, obscene teaser rates, and frequent flyer points for jumping on a two year contract. Meanwhile, you’re paying your contracted rate, dealing with spotty service, and have a year old phone held together with duct tape and superglue.
I see these introductory pitches and I feel like I need a jar of Vaseline…
Where’s the love for the rest of us?
*Wouldn't William Faulkner have been proud of that epic opening line?