US president George Bush announced a range of measures last week in a bid to help American homeowners meet mortgage payments following the recent US sub-prime crash.
This comes as Federal Reserve chief Ben Bernanke pledged to shelter the US economy from the turmoil in the world markets, hinting that a rate cut might be on the cards later this month.
Bush says he wants Congress to change the law to allow the Federal Housing Association to guarantee loans for borrowers who are 90 days behind on their payments.
He also called for a temporary tax code alteration to help struggling mortgage holders to avoid unexpected taxes.
However, Bush said it was not the federal governent’s job to bail out lenders, many of whom have gone bankrupt.
Bush says: “The Government’s got a role to play. But it is limited. A federal bail-out of lenders would only encourage a recurrence of the problem. It’s not the Government’s job to bail out speculators or those who made the decision to buy a home they knew they could never afford. Yet there are many American homeowners who can get through this difficult time with a little flexibility from their lenders or little help from their government.”