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Bush to Unveil Bailout Plan in Mortgage Crisis

Reforms will help families keep their homes

By Peter Fearon,  Newser Staff

Posted Aug 31, 2007 5:42 AM CDT

(Newser) – President Bush will announce a rescue package for homeowners with subprime mortgages faced with foreclosure. The package will include a call for Congress to give the Federal Housing Administration more power to help borrowers keep their homes—and stricter enforcement of laws against predatory lending, Reuters reports.

Economists fear worried homeowners will rein in spending enough to tip the economy into a recession. The Federal Reserve has already taken independent steps to increase the money supply and may cut interest rates next month. Bush will also outline reform efforts to "prevent these kinds of problems from happening in the future," an official said.

A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver on Wednesday, Aug. 29, 2007. The economy grew at its strongest pace in more than a year during the spring as solid improvements in international trade and business investment helped offset weakness in...
A foreclosure sign tops a sale sign outside an existing home on the market in northwest Denver on Wednesday, Aug. 29, 2007. The economy grew at its strongest pace in more than a year during the spring...   (Associated Press)
A sign advertises a bank repossessed home for sale in San Clemente, Calif., Sunday, Aug. 5, 2007. Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide, a research...
A sign advertises a bank repossessed home for sale in San Clemente, Calif., Sunday, Aug. 5, 2007. Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year,...   (Associated Press)
President Bush speaks about the Mississippi rebuilding efforts Wednesday, August 29, 2007, in Bay St. Louis, Miss.  (AP Photo/Evan Vucci)
President Bush speaks about the Mississippi rebuilding efforts Wednesday, August 29, 2007, in Bay St. Louis, Miss. (AP Photo/Evan Vucci)   (Associated Press)
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