Treasury Secretary Henry Paulson advised the mortgage industry today to give help to millions of financially stressed homeowners whose mortgages are set to rise. His comments signal that the Bush administration is starting to push lenders to expand relief beyond subprime borrowers to homeowners with other adjustable-rate loans, reports the Wall Street Journal.
Paulson told the New York Society of Securities Analysts he expects the US economy to avoid a recession. His remarks reveal, however, that the housing crisis is spreading to the general population of homeowners and not just those with bad credit. Paulson commented that "default rates are rising in the prime market, and it bears watching," said a treasury spokeswoman.