President George W. Bush is expected to announce a five-year interest rate freeze on some subprime mortgages as part of a deal between lenders and regulators brokered by Hank Paulson, Treasury secretary, to prevent a tidal wave of mortgage foreclosures. Financial Times, Daily Telegraph

The five-year freeze – a compromise between regulators, who were pushing for a seven-year freeze, and some lenders, who had argued for a one- or two-year deal – was in a draft accord circulated yesterday, a Treasury official confirmed.

However, the official cautioned that as of yesterday afternoon in Washington the agreement had still not been signed off by all parties.

An industry representative said the five-year freeze would apply to sub-prime adjustable rate loans taken out between January 2005 and July 2007, with rate resets scheduled between January 2008 and July 2010.