Bush warns against bad proposals on housing slump

NEW YORK (Reuters) - President George W. Bush on Friday said the root cause of the U.S. economic slowdown was a downturn in the housing market and said he strongly rejected some proposals to deal with the crisis.

He said a proposal for state and local governments to buy abandoned and foreclosed homes would only help lenders and instead of helping Americans stay in their homes.

He said allowing bankruptcy courts to change mortgage terms would send the wrong signal to financial markets.

(Reporting by Tabassum Zakaria; Editing by Lori Santos)