Worries that the pending higher rates could cause hundreds of thousands of homeowners to default on their loans, thereby putting added pressure on the housing market, Paulson mentioned this particular concern as the reason why the federal government arranged a plan with the mortgage industry to freeze rates for a full five years to give the market time to recover.

Although the U.S. economy is not yet in a recession, some people have feared that the sub-prime home financing market would push the economy downward if intervention did not take place. Paulson added that a housing correction is inevitable, even necessary given the five-year period where prices and sales climbed to record levels.

Some opponents to the Bush plan believe that the president is responding to election year pressures although the president himself is not running for office.

In a related story, more than 86,000 mortgage industry jobs disappeared in 2007 due to the turn down in the lending market according to news reports.

The entire mortgage industry is suffering and the reverberations are being felt and demonstrated in the laying off of more than 500 Wells Fargo employees. Citing a weak buying market, intense competition, and rising interest rates as being additional factors in the layoffs, Wells Fargo says that there lending business to people with good credit remains strong.

Despite the layoffs, as many as 150 employees could secure work with Wells Fargo at another San Francisco Bay area location.