A subprime fix?

last updated 8 January 2015

What happened

President Bush is expected on Thursday to unveil a five-year freeze on interest rates for some subprime mortgages. (Financial Times via MSNBC) Lenders agreed to the plan, which was crafted by Treasury Secretary Henry Paulson to ease a coming wave of foreclosures threatening to tip the economy into recession. Democrats said the plan didn't go far enough. (The New York Times, free registration)

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The politicians are stepping onto risky ground here, said syndicated columnist Froma Harrop in The Seattle Times. “The mortgage free-for-all set off a plague of bad judgments by lenders, borrowers, investors and Wall Street alike.” But Democrats mulling alternative plans should keep in mind that any lifeline that looks like it is rescuing “the McMansion crowd” from their own “folly” is likely to “put Americans in a sour mood.”

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