Bush Promises Mortgage Relief

Fed agencies to offer aid to help Americans during credit squeeze
By Wesley Oliver,  Newser Staff
Posted Aug 31, 2007 2:52 PM CDT
President Bush, center, accompanied by Treasury Secretary Henry Paulson, right, and Housing Secretary Alphonso Jackson, makes a statement on home ownership financing, Friday, Aug. 31, 2007, in the Rose...   (Associated Press)
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(Newser) – The government will roll up its sleeves and aid homeowners battered by the subprime mortgage crunch, but it will forsake “speculators” trying to exploit the crisis, President Bush said today. The FHA will step in and help delinquent borrowers avoid foreclosure by refinancing at lower rates, but experts predict more than 2 million Americans will lose their homes, Bloomberg reports.

Tighter credit conditions and higher borrowing costs have been squeezing homeowners, and Democrats have slammed Bush for not stepping in. The president said a new government program will allow "many families who are struggling now" but have good credit to refinance. An industry executive called the initiative “well-timed,” especially as private lenders bail on loans. (Read more housing market stories.)