Paulson says servicers, interest rates helping ARM borrowers

Administration digs in heels against bailout

Cuts in short-term interest rates have reduced the payment shock of adjustable-rate mortgage resets, and although foreclosure starts continued to grow in January, loan servicers increased the number of loan modifications at a faster pace.

That was the word from Treasury Secretary Henry Paulson on Monday, as he restated the Bush administration’s arguments against a government bailout of mortgage lenders before the National Association of Business Economists.