sub primes were and are a legal scam, offered to people that are playing the odds of refinance or flipping before the bird comes home to roost. they should never had been allowed to do this in the first place (bad Vodoo economics) and now the Feds have to step in to save their collective asses to make sure the cancer doesn't spread.

Ok, just a shot in the dark here,..but I think NAV is talking about how GW Bush is willing to help those who have purchased homes with adjustable interest rates. He is wanting lenders to allow those people to have fixed interest rates. He is BUSH,..HE IS MAKING IT HAPPEN!

I think it is a good move overall.

Certain lenders started to offer sub-prime morgages( a loan with a intrest rate below the feds prime intrest rate) for a certain lenght of time, 60 months or so, then at the end of that time the intrest rate would go up big time. the idea being,a low morgage payment in the begining...and a refinance before the 60 months was up.It was also used by people to "flip" a house, buy a fixer upper, do the repairs and sell it at a profit before the sub-prime ran out.As the housing market went south and credit dried up,people were stuck with the huge increase in their morgage payments, some went from $750 per month to $ 2600 per month, as the intrest rate went from 2.3% to 15.9%. most of these people had a hard time with the $750,so when it balooned up to $2600 they defaulted on the loan.

People also have the wrong Idea of what the feds will do to stop this cancer, the Feds will not "pay your morgage" they will on a case by case basis through certain lenders, stave off forcloseure by exchanging your A.R.M,(ajustable Rate Morgage) to a fixed rate 2 points over prime, and any past due amounts added to the back end of the term of the loan.

As Nav expected,the Feds came out with a srong sugestion to lenders to re work the sub prime A.R.M's and back load the outstanding amount.They expect 2 million sub primes will expire and roll over by 12/08.