Bush administration working on mortgage crisis
Secretary of the Treasury, Henry Paulson says that while the Bush Administration is working on repairs, there is no simple solution to the US mortgage crisis.
In a prepared speech that was released by the Treasury, Paulson says that no easy fix will repair damage of the last few years.
The speech was to be release later in the day, Monday. In it, Paulson says, "Working through the current situation and getting the policy right is more important than getting the policy announced quickly." In his remarks, Paulson is eluding to the plan being put in place by the Bush Administration to help subprime lenders avoid facing foreclosure on their properties.
Numbers provided by the speech show the credit crisis clearly. This includes some 1.8 million subprime mortgages, which are facing interest rate resets during the next 24 months to rates much higher than lenders are currently paying. Paulson says, in experts from the speech, "By preventing avoidable foreclosures, we will safeguard neighbourhoods and communities and fulfil our responsibility to protecting the broader US economy." Additionally important are his remarks on how the plan will play out. "However, let me be clear: there is no single or simple solution that will undo the excesses of the last few years."
The Bush Administration has announced and implied on several occasions that it is working to fix the housing crisis. Announced was the freeze on some subprime mortgage rate increases for the next five years, which was brokered with the mortgage lenders and done without the use of US taxpayer dollars. Additionally, in an interview last week, President Bush implied that his administration was working on a fiscal stimulus program.
Many markets around the globe are monitoring the economic forecast in the US with concerns in the economy, credit market and the overall housing market being the centre for debate worldwide.