The Bush administration's plan to help troubled homeowners avoid foreclosures through a broad loan modification strategy has been met with mixed reactions, and could raise the threat of investor lawsuits.
The plan, announced on Thursday, would freeze for up to five years the interest rates of some subprime borrowers. President George Bush has said that up to 1.2 million people will be eligible for assistance. However, according to reports, only a fraction will actually qualify for the rate freeze. Other borrowers will be able to refinance existing loans into new private mortgages or have them moved into an FHASecure loan.