Treasury tells lenders to give subprime borrowers chance

Treasury Secretary Henry Paulson told more than a dozen mortgage lenders that the Bush administration wants them to give subprime borrowers a chance to keep their homes.

"We need an expansion of mortgage financing products," Paulson said at the start of meeting today in Washington that included Angelo Mozilo, chief executive officer of Countrywide Financial Corp.

The Bush administration is seeking ways to help homeowners meet higher interest payments as their subprime loans "reset" higher in the next year to 18 months, he said. The Treasury secretary said he convened today's meeting to get the lenders' help in identifying borrowers at risk and arranging credit counseling for them.

Paulson told the group, which also included representatives from home lending units of Citigroup Inc. and JPMorgan Chase & Co., that he saw "signs of improvement in some markets."