Industry News

Lenders weigh plan to freeze rates on ARM loans

HOPE NOW members asked to do workouts

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Lenders and loan servicers who have signed onto the Bush administration's HOPE NOW initiative to improve communications with troubled borrowers may be prepared to take a more radical step -- freezing the interest rates on some subprime loans scheduled to reset. When launched in October, the HOPE NOW initiative was a partnership between the Treasury Department, U.S. Department of Housing and Urban Development, and 11 loan servicers that handle 60 percent of U.S. mortgages to expand outreach to borrowers facing foreclosure. Since then, the Bush administration has been negotiating with the coalition's members to engage in large-scale workouts with troubled borrowers. The Wall Street Journal reported today that while details of such a plan are still being worked out, an agreement could be announced as soon as next week. Treasury Secretary Henry Paulson is scheduled to speak Monday at a National Housing Forum hosted by the Office of Thrift Supervision, where he will discuss efforts to addr...