Decline in market still projected

Treasury Secretary Henry Paulson said the housing decline will continue, and a program aimed at heading off a wave of foreclosures may need to be expanded beyond subprime borrowers.
“There is no evidence it is bottoming,” Paulson said of the housing decline last week on CNBC television during a trip to New York. “The evidence would be that it has further to run.”
The Treasury chief indicated the outlook may prompt an expansion of the plan Bush administration officials brokered with mortgage lenders last month. The initiative is aimed at helping as many as 1.2 million Americans keep their homes by making it easier to negotiate affordable loans and freezing some adjustable-rate mortgages at current rates.
“We have this wave of resets coming,” Paulson said, referring to the almost 2 million of adjustable-rate loans forecast to jump to higher rates in the coming two years.
The number of Americans signing contracts to buy previously owned homes fell more than forecast in November, signaling further deterioration in housing, an industry report showed. Sales of new homes fell to the lowest level in 12 years in November.
In Washington, President Bush acknowledged “new signals that should cause concern.”
“And one of the signals is the fact that the housing market is soft, and it’s going to take a while to work through the downturn,” Bush said.
The New York-based American Securitization Forum, which represented investors in the talks that led to the housing plan, said it was open to including prime and other types of loans in the program.
“To the extent that servicers can develop and apply systematic approaches to assist them in their efforts to identify appropriate loss mitigation outcomes for adjustable rate mortgages other than subprime, we support those efforts,” George Miller, the group’s executive director, said in a statement. &middot