Sources say the Bush Administration will announce Thursday that certain homeowners that have subprime mortgages with adjustable interest rates will benefit from a five year moratorium on future schedule interest rate hikes.

knoxville tn homes for sale

Some Knoxville TN homeowners with sub-prime ARMs will benefit from a rate freeze for the next 5 years in a deal to be announced this coming Thursday.

Under the agreement certain mortages originated between the start of 2005 through July 30 of this year with rates that are scheduled to rise between Jan. 1, 2008, and July 31, 2010 will have their rates frozen at current levels for the next five years.

This plan is reported to only be available to owner-occupied Knoxville area homes; not investment properties.

Through October of 2007, there were about 1.8 million foreclosure filings nationwide, compared with about 1.3 million in all of 2006, according to Irvine, Calif-based RealtyTrac Inc. With home loan defaults still rising, the trend is expected to worsen next year.

According to RealtyTrac Knoxville/Knox County foreclosures are trending down instead of up like some states. The top 5 states for foreclosures are California, Georgia, Florida, Michigan, and Texas.

I’m wondering if this mortgage freeze scheme will actually happen because a mortgage note is a contractural obligation and a very high percentage of these loans are sold to investors who are counting on getting the higher payments.

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