The Bush administration has developed a plan to freeze interest rates for five years for thousands of strapped homeowners whose mortgages were scheduled to rise in the coming months. The proposal was developed in negotiations led by Treasury Secretary Henry Paulson with the mortgage industry. It would freeze introductory "teaser'' rates on subprime mortgages, preventing them from resetting to higher rates for five years. But there are tough new requirements, including that borrowers can't have missed any payments at the old, lower rates. President Bush says the plan isn't a bailout of real estate speculators or anyone who made a "reckless'' decision to buy homes they couldn't afford. He calls it a "sensible response to a serious challenge.'' The White House says it would help "potentially a little more than a million'' people who can afford payments with their introductory rates, but not if they jump to higher rates. But Bush says help will only come to those who ask for it. He's urging people to call a new hot line: 1-888-995-HOPE. A spokesman says the plan is voluntary, adding it does not represent federal intrusion into the private market.
Home foreclosures rose to a record high in the third quarter. The Mortgage Bankers Association says the percentage of all mortgages nationwide that began the foreclosure process jumped to a record high of 0.78 percent in the July-to-September quarter. More homeowners also fell behind on their monthly payments. The delinquency rate for all mortgages rose to 5.59 percent in the third quarter, the highest since 1986. Payments are considered delinquent if they are 30 or more days past due. Association chief economist Doug Duncan tells the Associated Press that foreclosures and late payments are likely to stay high or get worse in the coming quarters.
A Harris County Medical Society poll finds six major health insurance companies operating here are failing patients in patient care, payment and customer service. The companies included in the survey are Aetna, Blue Cross Blue Shield, Cigna, Humana, Unicare Health Plans and United Healthcare. More than 65 percent of 478 physicians polled say they have difficulty getting services approved for their patients, and 70 percent say insurers have denied payment of medically necessary care. Seventy percent say they are not paid in a timely fashion and 60 percent say insurers are not honoring contracted rates.
The National Institutes of Health sponsored an interactive medical symposium for 500 Houston high school students today at the Edwin Hornberger Conference Center, hoping to foster interest in medicine. At the Michael E. DeBakey Seminar in Medicine, students heard from and spoke with nationally recognized scientists and doctors, and viewed organ and transplant medical equipment, heart stents, pacemakers, oxygenators, a coronary artery bypass graft, hearing aids and the original DeBakey intravenous roller pump from 1935, which led to the concept of the first heart-lung machine. It's the fifth in a series of seminars being held nationwide by NIH.
The Labor Department is reporting a big drop in jobless claims last week. The number of laid off workers filing claims for unemployment benefits fell by 15,000. That's the largest decline in three months. A total of 338,000 applications for jobless benefits were filed nationwide. Claims had surged the week before, to the highest level since February. That leaves the four-week average for claims still rising. Analysts caution against reading too much into last week's improvement, because the numbers around holiday periods are typically volatile. Economists are looking for the labor market to weaken under the impact of a variety of blows to the economy, including the downturn in housing, the credit crunch and rising energy prices.