The Economic Outlook

Critics have charged that it will only help a minority of subprime borrowers.
The 1.8 million ARMs coming up for adjustments fall into three buckets. There are some people that have been unable to make initial payments, often they put little money in the home, and they were renters before. That's roughly 600,000. There's a second group that has been able to make their payment and are going to have trouble making the higher payment. Those people will get put very quickly into a fast-track modification, which will be for all intents and purposes an interest freeze. And then the other 600,000, those with higher credit scores, will have to go through  a longer process. Some of them will be able to afford the higher rates, others will be able to refinance.

© 2008