The Bush administration has outlined measures intended to avoid a massive and potentially politically damaging wave of home foreclosures. VOA's Barry Wood has more from Washington.

Treasury Secretary Henry Paulson says the Bush administration is pursuing a comprehensive plan to help homeowners who have adjustable rate loans that are expected to see a big jump in interest rates.

Speaking to a housing conference in Washington, Paulson said the government has identified several categories of sub-prime mortgage borrowers, including those who took out special loans with low interest rates for the first years.

"The fourth category is those with steady incomes and relatively clean payment histories who could afford the lower introductory mortgage rate, but can not afford the higher adjusted rate. We are focusing on this group," he said.

Paulson said there will be no significant government bailout of either borrowers or lenders, but some reports say lenders may be asked to extend the low introductory rates for another year or so to help borrowers.

Economist David Hale says the housing foreclosure problem is most acute in cities like Detroit, New York, Miami, and Cleveland.

"We are talking about potentially, in the year ahead, two million people with mortgages being reset to higher interest rates, with the increased risk of default coming from that. It is not a huge part of the population. But it is a distinct number. You know, two million people at risk. And it is concentrated more in low-income neighborhoods than high-income neighborhoods because a sub-prime borrower is someone who has a modest income and might have had more job risk," he said.

Since a housing related credit squeeze hit U.S. financial markets in August it has become harder to obtain mortgage loans. Nationwide home prices have been declining after a five-year boom.

The inability of some borrowers to make their payments has led to a sharp rise in foreclosures and predictions of many more in 2008.