Treasury Undersecretary for Domestic Finance Robert Steel said Thursday that current mortgage-related initiatives — including HOPE NOW’s loss mitigation programs, an ASF-led “rate-freeze” plan, and Project Lifeline — need time to work, and that now was not the time to be considering a Federally-funded mortgage bailout. In remarks delivered at Reuters’ Housing Summit in New York, Steele provided wide-ranging insight on the broad-based repricing of risk now gripping most financial markets, led by the ongoing mortgage industry debacle:

“You can pull that thread into rating agencies. You can pull that thread and go onto the banks’ balance sheets. You can pull that thread into lots of places, but it’s the same thread,” said Steel, a former Goldman Sachs executive. … “What should we do, if we should do anything? If we shouldn’t do anything, what are the likely ways in which it will unfold so that we can prepare?” he said. “What we’ve tried to say from the beginning of last summer is that the repricing of risk will take time. It will work through.”

Coverage by Reuters’ Patrick Rucker focused on the prospects for a mortgage bailout:

Treasury Undersecretary Robert Steel told the Reuters Housing Summit it is proper for homeownership to hold a special status for policymakers because it is such an overwhelming share of consumer debt and so closely tied to an individual’s sense of his own wealth. “If I default on my credit card debt, no one here knows and it has no affect on your credit card debt. If I am your next-door neighbor and I get foreclosed and thrown out, and the grass goes to heck and the home is boarded up … that affects you,” he said at the Reuters Summit in New York and Washington. … “If I start talking about what we might do if this happens, if that happens … We want to stay on our message with what we are trying to do. Right now is a critical time to make sure we are doing as much as we can for Hope Now,” he said.

Steele did note, however, that the Treasury was evaluating a plan floated late Wednesday by the Office of Thrift Supervision to establish a secondary market for “negative equity certificates.” Housing Wire covered the proposed plan in an earlier story Thursday.