The U.S. government is working harder than ever to help troubled mortgage holders, Treasury Secretary Henry Paulson said Monday.

"We are working aggressively and quickly, utilizing available tools and creating new ones, to help financially responsible but struggling homeowners," Paulsen said in a speech at a housing conference sponsored by the Office of Thrift Supervision.

Paulson outlined the latest government and industry efforts to help struggling home owners keep their homes. The plan included reaching more struggling borrowers and finding affordable mortgage solutions.

He stopped short, however, on providing further details on a plan to freeze mortgage rates, but people close to the process say a plan could be announced this week.

Paulson said the Hope Now alliance, a coalition of lending industry executives, mortgage servicers, community groups and investors, which the Treasury Department helped put together, has already sent out thousands of letters to consumers who, because of resetting interest rates on adjustable rate mortgages (ARMs) may be in danger of falling behind on mortgage payments.

One of the worst problems lenders encounter in dealing with defaulting borrowers is their reluctance to contact the lender when they begin to fall behind. About half of all delinquent borrowers do not contact their lenders.

He said Hope Now alliance is sending out the letters 120 days in advance of the resets so borrowers have plenty of time to act before foreclosure hits and the letters include a hot line number where the borrowers can obtain almost instant advice. Lenders are also considering several innovative programs. They include both loan modifications and refinancings.

He added that many state and local governments, especially in the nation's hardest hit areas, are also trying out solutions, such as funds for financially-able borrowers to refinance out of expensive subprime loans.

"Given the local nature of housing markets, state and local solutions can be particularly effective," he said.

According to Paulson, the efforts not only will help the borrowers themselves but will also, by preventing foreclosures and sales which can drive down property values, help maintain the financial stability of entire communities.

He added, "It also helps investors and lenders avoid unnecessary and costly foreclosures that are not in their interest."