In the administration's most detailed reaction to the steepest housing slump in 16 years, Paulson said that government and the financial industry should provide immediate help for homeowners trying to refinance current mortgages before they reset at much higher rates.

Out on Phoenix's suburban fringes, where cement mixers are fast colonizing what's left of the hay and cotton fields, the day is winding to a close. The home hour has arrived.

If the deal falters, the student lender would become the biggest casualty of the recent market turmoil. Last month, Home Depot was pressed to renegotiate the sale price of its professional supply unit down by 17 percent, or $1.8 billion, amid the credit crisis and the housing market problems.

The number of homes entering foreclosure, being auctioned and repossessed by banks jumped by 36 percent in August from the month before, with cities in California, Florida and Nevada showing the biggest increases, according to a report to be released Tuesday.

Historians will look back at innovations in financial risk-spreading as a major development of the late 20th century. A mortgage used to be another name for a loan from a bank, but that era wound down fast when Wall Street invented "securitization," or financial risk management, to use the jargon, in the 1970s.

Trading in the shares of a large U.S. mortgage company was suspended Monday, and the largest insurer of home loans in the United States said its stake in a business that underwrites and invests in mortgage securities may be worthless.

Sales of the securities - used to pool bonds, loans and their derivatives into new debt - dwindled to $3.7 billion in the United States this month from $42 billion in June, JPMorgan Chase said Monday. The market is "virtually shut," the bank said in a report last week.

Column about the real estate practice of the cash-back mortgage transaction, in which a buyer receives a "rebate" to finance his own down-payment — a rebate that the lending bank never finds out about.

The U.S. economy grew at its weakest pace since 2003 in the fourth quarter while inflation rose, the U.S. government reported Friday, sending the dollar to a record low against the euro and fanning concerns of an accelerating slowdown.