Interest rates on some subprime loans will be frozen for five years.

Interest rates on some subprime loans will be frozen for five years.

Interest rates on some subprime loans will be frozen for five years.

A summary of what's in the major U.S. newspapers.
Dec. 6 2007 6:02 AM

Subfreezing

The Washington Post, Los Angeles Times, and USA Todaylead with word that the Bush administration will announce today that it has reached a deal with mortgage lenders to freeze interest rates for five years on a certain number of subprime loans. The plan, which was reached after weeks of talks between officials from the Treasury Department and the mortgage industry, is meant to avoid a large number of foreclosures that could affect the wider economy. But it's already facing criticism both by those who see it as an unfair bailout for people who took on more risk than they could bear as well as from those who think it won't cover enough homeowners in distress.

The New York Timesleads with new details on what led intelligence agencies to reverse their thinking about Iran's nuclear program. It all apparently began last summer after analysts got a hold of notes of "conversations and deliberations" between Iranian military officials, some of whom were complaining "bitterly" about the decision to end the country's efforts to get nuclear weapons. The Wall Street Journal leads its world-wide newsbox with news that Defense Secretary Robert Gates has rejected a proposal to shift Marine troops from Iraq to Afghanistan. Gates told Marine Corps officials they're still needed in Iraq.

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In order to qualify for the five-year freeze on interest rates, a homeowner must have taken out an adjustable-rate loan that will reset to a higher rate any time between next year and mid-2010. The plan would only cover those who currently live in their homes  and have kept up with the payments. In addition, a lender could deny the freeze to anyone it judges has enough money to cover the increase. Out of all the papers, the NYT is the most skeptical about the deal and says it "would exclude many–if not most–subprime borrowers." There are no hard numbers but one estimate says a mere 12 percent of all subprime borrowers, or approximately 240,000 homeowners, would benefit. USAT notes consumer advocates are particularly critical of the fact that the plan doesn't help those who are currently in trouble because their rates have already gone up.

The LAT has the most insider details on how the deal came about, and says there was much debate between government officials and the mortgage industry on the length of the freeze. The government officials wanted it to last at least seven years, while the industry said it should be as short as possible. Everyone notes that no taxpayer money will be used to pay for the plan, but rather investors who bought the mortgages as part of securities offerings will end up "bearing the brunt" (USAT) of the cost. The Post, for some reason, finds it necessary to give some before-the-jump space to a random man-on-the-street who is upset that "those of us who wisely bided our time get screwed." For its part, the WSJ has a good Page One piece that details how immigrants got particularly ensnared by the subprime mess.

The NYT points out that the "notes and deliberations" of Iranian military officials were "corroborated by other intelligence," including the intercepted communications that several of the papers have been writing about this week. Officials are still mum about how the new intelligence was obtained, but it seems clear that none of it explained why the Iranian government decided to end its nuclear weapons program. Yesterday, the White House changed its version of what Bush knew before he warned of World War III. The new version is that Bush was told in August that Iran's nuclear weapons program "may be suspended" and "the new information might cause the intelligence community to change its assessment" but it was too soon to tell. The NYT makes a point of noting that it doesn't seem all the intelligence agencies fully agree Iran has stopped working on its nuclear weapons program.

The LAT fronts a look at how the new intelligence report has made Arab states nervous because of fears that Iran could feel "emboldened" to step up its military spending, as well as its support for Islamic radicals. "There's no trust on the Arab side about Iran's intentions," an expert said. At the same time though, some believe the report could lead to a new level of cooperation between Iran and its neighbors. The WSJ notes several Arab leaders have been backing away from supporting more economic sanctions against Iran. Meanwhile, Iranian President Mahmoud Ahmadinejad said the report was a "final blow" to critics and a "declaration of victory."

Both the NYT and WP run opinion pieces that question this week's intelligence report and its conclusions. In the WP, John Bolton says the estimate illustrates the politicized nature of intelligence, and notes that there is, in fact, "little substantive difference" between the latest report and the one in 2005. The main difference has to do with the "psychological assessment" of "motives and objectives" rather than "hard data." Bolton goes on to say that much of the report is unsubstantiated by the evidence and warns there are real concerns the new intelligence was planted by Iran. In the NYT, two experts warn that the report is flawed as well as "both misleading and dangerous" because it defines a weapons program "in a ludicrously narrow way." Iran continues with certain activities that are "crucial to the ability to make a bomb" and should not be underestimated. "We should be suspicious of any document that suddenly gives the Bush administration a pass on a big national security problem."

The NYT fronts a look at how Sunni insurgents have been moving north and are now apparently trying to turn Mosul into their base of operations. American and Iraqi commanders say they could use the help of more Iraqi battalions in the area. The LAT fronts word that U.S. commanders in Iraq are trying to push back efforts from the Pentagon to have a quicker withdrawal of troops.

Most papers front news out of Omaha, where a young gunman opened fire at a mall and killed eight people before he shot himself.

USAT carried out an analysis of lottery data and found that approximately $570 million in prizes went unclaimed last year. Most of it involves small winnings, but about 100 lottery tickets worth $100,000 or more have not been claimed, including one from Queens worth a whopping $31 million.

Daniel Politi has been contributing to Slate since 2004 and wrote the Today’s Papers column from 2006 to 2009. Follow him on Twitter.