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
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)
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(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. (Read more Federal Housing Administration stories.)