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The society had argued that the small print of the mortgages contained a clause that, under certain circumstances, enabled the lender to change the interest rate "to something more in line with the current market norm".
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The nation's housing market, which was propelled by low interest rates to something of a frenzy in recent years, is poised for a slowdown that many economists fear could chill the broader economy.
We have been hearing that there have been loan modifications, what we jokingly call "kick-the-can-down-the-road loan modifications," where you don't cut their balance, the balance stays at $412,000, but you cut the interest rate to like 1% or something.
Suppose that desired savings and desired investment spending are currently equal, and that something causes the interest rate to fall.
One other thing: Brad takes fairly seriously the calls for higher interest rates to avoid bubbles, or something, essentially because low rates create moral hazard for the financial sector.
This will force interest rates to rise.
The European Central Bank raised interest rates to 4%.
Fourth, everyone expects interest rates to rise.
China Hikes Interest Rates To 5.58%.
China cuts interest rates to spur economy.
In his model, it might take a real interest rate of something like -2.5% to clear the economy.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com