When people started getting subprime mortgages, knowing their payments would drastically increase they figured the money would be there for the higher payment.

In most cases they were wrong and many people have had their homes foreclosed. This was the doing of themselves and the real estate agents and bankers who allowed it to go on.

It was especially attractive to speculate and buy several properties with the expectation the house would increase in value and some other sap would come along to buy the house in which they had almost no equity.

Then interest rates were raised by the Fed and the bubble burst.

Word has it now that President Bush and his administration have worked out a plan that would freeze the subprime mortgage people now hold for five more years.

There is a catch: Only borrowers who got mortgages between the beginning of 2005 through July 30 of this year will be eligible, and only individual owners instead of speculators will be eligible.

Five years should give these people enough time to make enough extra money to cover their mortgages or sell the property without taking a loss if the market rebounds from this fix.

The administration said that President Bush will speak on the agreement at the White House on Thursday and the Treasury Department announced that Treasury Secretary Henry Paulson and Housing and Urban Development Secretary Alphonso Jackson would hold a joint news conference Thursday afternoon with officials of the mortgage industry.

Treasury also announced that there would be a technical briefing to explain more of the details of the proposal.

Bush Administration Working to Aid Subprime Mortgage Holders, Extend Introductory Rates Paulson, who has been leading the effort to craft a plan, said on Monday that the program would only be available for owner-occupied homes — as a way to make sure that the break is not granted to real estate speculators.

The plan emerged from talks between Paulson and other banking regulators and banks, mortgage investors and consumer groups trying to address an avalanche of foreclosures that are feared as an estimated 2 million subprime mortgages reset from lower introductory rates to higher rates.

The higher rates in many cases will boost monthly payments by as much as 30 percent, making it extremely difficult for many people to keep current with their loans.

The plan is aimed at homeowners who are making payments on time at lower introductory mortgage rates but cannot afford a higher adjusted rate.

Let’s hope this gives some relief and that people have learned a valuable lesson from this whole situation.