Are Loan Modifications Exotic Mortgages?

Well, I have been saying for months that since the banks are offering low fixed rates for the first 5 years they are just postponing the inevitable because the rate will increase.  Once the rate increases, if the borrower can’t afford the payment or sell the house because they are still upside down they are going to be in the same position they are now but there probably won’t be as much help then.  I wouldn’t take this option unless it were a 30 year fixed rate. 

“The column in today’s New York Times by Floyd Norris raises the same prospect, while offering a little more leeway to the administration.  While he writes that it’s “conceivable that this process is doing more to drag out the foreclosure crisis than to alleviate it,”