Paulson expects plan soon to address ARMs: report

NEW YORK (Reuters) - A plan to help homeowners renegotiate adjustable rate mortgages will be ready before the end of the year, U.S. Treasury Secretary Henry Paulson told BusinessWeek magazine.

"Well before the end of the year, we will have a template and the infrastructure in place to make it easier to handle the wave (of resets) that is coming at us," Paulson was quoted as saying in the magazine's December 10 issue.

The program would let mortgage lenders, servicers and investors help eligible homeowners renegotiate adjustable-rate mortgages (ARMs) that become more expensive, according to the report.

Subprime mortgages worth $362 billion are expected to reset to higher interest rates in 2008, according to BusinessWeek.

"We'll have broad agreement on criteria that will make it easier to modify mortgages in the volumes we need," he said.

The plan will be aimed at the "middle bucket" homeowners, rather than ones who can afford the higher costs or those at the bottom who can't afford to own their home even after refinancing, Paulson said.

"We are examining all public policy ideas," Paulson told BusinessWeek. "We are being aggressive and our thinking continues to evolve as we learn more."

A spokesman for the U.S. Treasury Department could not

immediately be reached for comment.

(Reporting by Nick Zieminski; editing by Carol Bishopric)