Bush set to unveil plan to battle mortgage crisis

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WASHINGTON, Dec 6 (Reuters): President George W Bush is expected to unveil a plan today to help struggling American homeowners avoid foreclosure, addressing a mortgage crisis that risks tipping the US economy into recession and has shaken financial markets around the world.
The plan hammered out by the US Treasury Department in talks with mortgage industry leaders would bring relief to many of the 2 million homeowners who took out loans with low teaser interest rates that are due to move sharply higher in the next year or so.
The White House said Bush would speak on the battered US housing market at 1:40pm EST (1840 GMT) Thursday. The White House said the president would discuss steps to help homeowners avoid foreclosure.
The plan that industry sources said Bush would outline is designed to temporarily hold rates steady for subprime borrowers who could not afford to stay in their homes otherwise.
As proposed by a mortgage investor trade group, it would offer a five-year "rate freeze" for subprime loans made from 2005 through the end of July, if they are due to reset over the coming two and a half years, according to a document obtained by the news agency.