Bernanke, Bush vow help is ahead

WASHINGTON - President Bush acknowledged "some unsettling times" in the country's troubled housing and credit markets, while Federal Reserve chairman Ben Bernanke offered more assurances steps would be taken to curb the fallout.

The housing slump, the worst in 16 years, is likely to drag on well into 2008, when the nation will be voting for a new president. Home foreclosures - now at record highs - and delinquencies are likely to get worse, Bernanke told the House Financial Services Committee yesterday.

Proposals in Congress would expand federal backing of mortgages. The House on Tuesday passed legislation that would give more leeway to the Depression-era Federal Housing Administration, which insures mortgages for low- and middle-income borrowers. The Senate has its own bill. The administration, meanwhile, is working with the FHA to help squeezed homeowners.

Bush said at a news conference yesterday "there is no question" these are "some unsettling times" in the housing and credit markets. "That's why I look forward to working with Congress to modernize the FHA loans so that people can refinance their homes."

Treasury Secretary Henry Paulson, who also appeared at the House hearing, signaled that the administration would consider allowing the mortgage giants Fannie Mae and Freddie Mac to temporarily buy, bundle, and sell as securities any loans exceeding $417,000, known as "jumbo" loans.