Industry Debates Bush Bailout

(Read more on the debt and equity markets.)

WASHINGTON, DC-In response to the worsening subprime mortgage crisis, President George Bush has unveiled a plan that he says will help as many as 1.2 million homeowners. The scenario he outlined in a press conference Thursday hinges on a deal between banking regulators and lenders to freeze interest rates on certain subprime mortgages for five years. Bush announced his plan the same day that the Mortgage Bankers Association reported that nearly 6.6% of Americans have fallen behind on their loan payments–a 20-year high.

In his speech, Bush outlined a few of the measures his administration has taken to stem the defaults. These included a new initiative at the Federal Housing Administration called FHA Secure and the formation of a public-private sector group called HOPE NOW Alliance.