So far, Philadelphia radio host Jay Lamont wins top prize for the most humorous reaction to President Bush's plan to streamline the process for modifying loans of certain homeowners with subprime hybrid adjustable-rate mortgages.

What's being called "the interest-rate freeze" will affect only 20 percent of subprime borrowers, Lamont told his WPEN-AM (950) listeners Dec. 9. "That's about the same percentage of passengers who were saved when the Titanic sunk."

The initiative amounts to a collective agreement among mortgage lenders and servicers to freeze interest-rate resets on adjustable-rate mortgages in an attempt to forestall further rises in foreclosures, which are reaching record numbers in California, Florida, Arizona, Nevada, Michigan and Ohio.

It's a step in the right direction, but for some experts it doesn't go far enough.

About 1.2 million homeowners could be eligible for help, but the freeze would cover only a fraction of those.

"We should not bail out lenders, real estate speculators, or those who made the reckless decision to buy a home they knew they could never afford," Bush said in announcing the plan.

Peter Morici, a University of Maryland economist, suggested that freezing adjustable-rate mortgages at teaser rates will only push the problem to the next president.

"What is needed is a mechanism to provide permanent financing - fixed-rate, long-term mortgages," he said. "The Treasury seems obsessed with what investment bankers do best in a pinch - short-term workouts that punt difficulties into the high grass.

"From Federal Reserve economists, we get lots of ideological ruminations about the need to force profligate lenders and borrowers to the gallows," Morici observed.

Lenders seem relieved that while many inside and outside government - including Realtors and residential builders - have placed them at the top of the list of causes for the current problem, hanging isn't an option.

Kieran P. Quinn, chairman of the Mortgage Bankers Association, applauded the president and Treasury Secretary Henry Paulson for "facilitating a private-sector approach, rather than a government-mandated one."

Edward Yingling, president of the American Bankers Association, said, "We appreciate the Bush administration for its efforts in bringing together private-sector players to develop a mechanism to modify mortgage loans to certain 'at risk' borrowers."

Bush might have gone too far, however, in laying blame on "those who made the reckless decision to buy a home they knew they could never afford."

Though I must quickly acknowledge that the National Multi-Housing Council is understandably biased toward the rental market, its president, Doug Bibby, makes a interesting point.

"For decades, the government has pursued a 'homeownership at any cost' housing policy," Bibby said. "They, like other participants in the housing sector, mistakenly assumed that prices would always go up."

What the freeze won't do, he said, "is change the fact that house prices were greatly inflated by issuing millions of nontraditional, poorly underwritten loans to borrowers who could not really afford them."

More important, as some in the industry point out, is that the issue in many cases was lack of education, not recklessness.

Still, despite the plan's limits, some economists have praised the concept.

"In the absence of substantive progress by the Congress in these areas, the administration is moving forward in areas within its sphere of influence that could have a positive impact on the housing and mortgage markets and avoid the perpetuation of a vicious downward cycle," said Brian Bethune, of Global Insight, a Lexington, Mass., economic-forecasting firm.

"The proposed 'interest-rate freeze' program - if it is structured with the right incentives, standards and regulatory features to deal with the potential pitfalls - is certainly a step in the right direction."