How Many Borrowers Will the Mortgage Rate Freeze Help?
The Bush Administration estimates that as many as 1.2 million subprime borrowers will be helped by the teaser-freezer plan. Other parties are not so optimistic. Mark Zandi, chief economist at Moody’s (Economy.com), estimates that only 250,000 homeowners will be eligible. An analysis from Barclay Capital suggests the number is closer to 240,000. The Center for Responsible Lending has the lowest projection at 145,000. To put these numbers in perspective percentage-wise, consider that an estimated 3.5 million homeowners are expected to default on their home loans over the next three years. If Bush’s plan helps only 250,000 borrowers as Zandi estimates, it will accommodate a mere 7 percent of the struggling population.
