So the news on the street today is that the “Hope Now” alliance, headed by Treasury Secretary Henry Paulson , is playing with the idea of freezing interest rates on some of the sub-prime loans in the market. In a sense this would preserve the teaser rates for a longer period of time allowing owners to avoid the jump in payments when the big reset arrives.

The congress actually has a plan as well. They are thinking of letting judges of chaper 13 bankruptcies modify the loan agreements. As if the bankruptcy process is not tricky enough. This would further delay foreclosures and allow the government to modify existing contracts! It almost seems unconstitutional…

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