Congress and Treasury to tackle mortgage crisis

Congress are racing to push through an array of election-year housing measures designed to help homeowners caught in the mortgage meltdown.

In a move proposed by the Democrats, the plan is aimed at helping strapped borrowers, whilst stabilizing a market plagued by uncertainty about the value of subprime mortgages made to people with questionably credit or low incomes.

The White House is evaluating the Democratic proposals, but Bush administrators say the administration does not want to reward risky behavior by borrowers, speculators and lenders.

Meanwhile, Treasury Secretary Henry Paulson is due to reveal sweeping new plans designed to help arrest the slide of the U.S mortgage crisis into a full-blown economic threat.

The regulatory blueprint proposes vesting news powers as a 'market stability regulator' in the Federal Reserve - effectively formalizing a role it already has been performing by providing liquidity to investment banks and lowering official interest rates.

Treasury is also considering merging the Securities and Exchange Commission, the U.S. markets watchdog, with the Commodity Futures Trading Commission that is charged with overseeing the activities of the nation's future market.

The plans would also give the U.S. central bank authority to demand that all financial system participants supply it with full information on their activities and present the Fed a right to collaborate with other regulators in setting rules for their behavior.

Paulson is set to reveal the Treasury's plan on Monday.