Official Says Market Turbulence Will Take Time To Be Resolved
Wednesday, September 12th 2007, 10:08 am
By: News On 6
WASHINGTON (AP) _ Treasury Secretary Henry Paulson said Wednesday that the turbulence that has hit financial markets will take some time to be resolved, especially in the area of subprime mortgages.
Paulson, speaking to officials of some of the country's biggest financial firms, said the Bush administration was looking for their help in making sure subprime homeowners get assistance in dealing with sharply rising mortgage payments as their initial low adjustable rate mortgages now reset to higher levels.
``We have been experiencing market turbulence and as I have said for awhile, it is going to take some time to work its way out,'' Paulson told the finance officials at a meeting at the Treasury Department. ``We are going to work our way through this, in some markets more quickly than others.''
Paulson said that ``we are already seeing signs of improvements in a number of markets that have been experiencing stress.''
But he said it was going to ``take longer to work through the problems in the subprime market,'' noting that there are a number of loans in this market that are scheduled to reset at sharply higher mortgage payments over the next two years.
Estimates are that 2 million homeowners will be facing steep increases in their mortgage payments over the next two years, putting many of them at risk of losing their homes. The session Wednesday was called as a followup to efforts announced by President Bush on Aug. 31 to provide more government help to borrowers struggling to cope with the higher mortgage payments.
Among those attending the meeting with Paulson was Angelo Mozilo, the chairman of mortgage giant Countrywide Financial Corp., which announced last week that it is facing the prospect of having to lay off 20 percent of its work force as it struggles with rising loan defaults.
Other companies represented were Wells Fargo & Co., CitiMortgage Inc. and JP Morgan Chase.