August 1, 2007 (LPAC)--An estimated 1.7 million Americans will lose their homes over the next year when adjustable rate mortgages reset, according to an analysis by Moody's Economy.com reported in today's New York Times.

In face of that moral catastrophe, Lyndon LaRouche has called for a freeze on home foreclosures, and emergency government action to guarantee stability of the banking system. LaRouche calls for putting the economy through the equivalent of a Chapter 11 bankruptcy in which personal savings and local banking functions are preserved, while the hedge funds and other speculative ventures take a bath. We don't need the hedge funds, but, instead, we need both the legislative and executive branches of the federal government to rationally devise a way out, based on job-creating investment in public infrastructure and industry, LaRouche has argued.

The resetting of adjustable rate mortgages will spread the carnage already experienced on the subprime market to the better-off homebuyers, who purchased houses beyond their means by taking out mortgages with low initial rates that reset to higher rates at a later time. The peak month for the resetting of mortgages will come this October, according to a repot by Credit Suisse, when more than $50 billion in mortgages will switch to a new rate for the first time. In total interest rates on $1 trillion worth of home mortgages, 12% of the nation's total, will reset for the first time this year or next.