Paulson: Housing crisis needs swift action

Washington -- U.S. Treasury Secretary Henry Paulson called for swift action to end the U.S. housing crisis, which he called the economy's "most significant current risk."

"The ongoing housing correction is not ending as quickly as it might have appeared late last year," he said in a speech to Georgetown University Law Center. "And it now looks like it will continue to adversely impact our economy, our capital markets and many homeowners for some time yet."

"Let me be clear: Despite strong economic fundamentals, the housing decline is still unfolding and I view it as the most significant current risk to our economy," he said.

He added, "The longer housing prices remain stagnant or fall, the greater the penalty to our future economic growth."

Paulson called on Washington and the financial industry to provide immediate help for homeowners trying to refinance current mortgages before they reset at much higher rates.

He also urged policy makers "to make some changes in our laws and rules in order to prevent some of the excesses and abuses of the last few years from happening again."

One such change is streamlining and modernizing the regulatory structure, which currently includes state regulators overseeing certain practices and federal regulators overseeing others, he said.

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