[DonaldC]

I predict the gov will strong arm banks to rewrite ARMs into fixed rate mortgages at the rate the borrower first had. This will help folks that can no longer afford the loan after the ARMs adjusted higher.

[NetSurfer]

The governor says lenders should reduce monthly payments by 20% to 30% by lowering interest rates on mortgages to as low as 3%, extend mortgage terms to 40 years, and delay some principal payments to the end of the loan term.

OC Register - Nov 6, 2008

[Reeses]

I predict the gov is running for the Senate.

Resetting ARMs to fixed won't be attractive to those who owe much more than the house is worth, which is the majority. Getting to live rent free in a nice house they can trash and loot, and not having to pay property taxes or homeowners dues, is too attractive to pass up. In some states the foreclosure process can take 1.5 years.

Really you want neighbors that have at least 20% equity, not those just scraping by. Those with no equity aren't going to improve their property for the bank's benefit. Speeding up foreclosures to get this bubble over with will get the construction industry and economy restarted faster than letting things go downhill for a long time.