According to the Bush administration, lenders are relaxing terms to help assist homeowners who are at risk for losing their homes due to the subprime crisis. This news is coupled with the fact that more low interest loans are going to be available, both to customers in the US and the UK. “I am encouraged that the number of borrowers receiving help is faster than the number entering foreclosure,” Henry M. Paulson Jr., the Treasury secretary, said in a speech on Monday.Currently, 16.7% of the 2 million subprime customers are unable to make their payments. Another 6% are already in the foreclosure process. This is resulting in a catastrophe in the housing market that is being felt on both sides of the Atlantic. The Federal Reserve is now behind a push to get more low interest loans into the market and is expected to drop rates shortly. Paulson stated, “Many of these borrowers won’t have to make any adjustment to their loans. This low interest-rate environment has made the rate resets less likely to create an affordability problem.” Paulsen commented that while some lenders are starting to help their customers, he would like it to move along at a quicker rate.
Related reading: Low Interest Loan
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