Bush Mortgage Relief Plan - Questionable Relief, Questionable Protection from Litigation
By Barry G. Sher, Keith W. Miller, Jodi A. Kleinick and Lawrence J. Conlan
In an attempt to contain the expanding fallout from the subprime mortgage meltdown, Treasury Secretary Henry M. Paulson, Jr. has worked with mortgage industry leaders to devise a plan to freeze interest rates for borrowers facing upward adjustments on their monthly payments. The resulting plan, which has been referred to as the Bush Plan, was announced by President Bush last week. Its terms and whether government should be involved in the process at all have engendered substantial debate among industry participants, legislators, homeowners, consumer advocates, and others. This Client Alert discusses the scope of the plan and considers some of its potential consequences.