President George W. Bush will propose reforms today intended to help homeowners with subprime mortgages avoid default.
Mr Bush will discuss the need for Congress to pass Federal Housing Administration reform legislation aimed at giving the agency the flexibility to help subprime mortgage borrowers, administration officials said.
One move will be an administrative change to allow the Federal Housing Administration to guarantee loans for borrowers at least 90 days behind in mortgage payments to help them avoid foreclosure, the Wall Street Journalreported.
It will be Mr Bush's first public step to address a crisis that has created turmoil in financial markets around the world
Many analysts warn that a spreading credit crisis could drag the US economy into recession, but the Mr Bush administration has repeatedly said that US economic fundamentals are healthy and that global growth is robust.
Financial markets in the United States and abroad have been volatile in recent weeks as US defaults have risen on so-called subprime mortgages to less credit-worthy borrowers, and questions have arisen about whether loans that have been bundled into securities sold overseas may also fail.
The Federal Reserve has taken steps to increase liquidity in markets and faces calls for interest-rate cuts to head off a broader credit squeeze that could drag economic growth down.