January 8, 2008 "No quick fix" to housing problem Play video

WASHINGTON (AP) - Although the Bush administration is working on efforts to combat the country's severe housing crunch, Treasury Secretary Henry Paulson says there is no quick fix.

In remarks prepared for a New York speech, Paulson points out that 1.8 million subprime mortgages are scheduled to reset to sharply higher rates over the next two years, raising the possibility of a market failure. He says that's why the administration brokered a deal with the mortgage industry to freeze certain subprime mortgage rates for five years to allow the housing market to recover.

Excerpts of the speech show Paulson noting "there is no single or simple solution that will undo the excesses of the last few years." He says, however, that by preventing avoidable foreclosures, "we will safeguard neighborhoods and communities and fulfill our responsibility of protecting the broader U.S. Economy."

The housing slump has been a serious drag on the overall economy, producing fears that the country could topple into a recession. NECN's Mont Fennel has more.