Washington ? The Bush administration and the mortgage industry, trying to combat a massive wave of foreclosures, are hammering out a proposal to temporarily freeze interest rates on certain troubled subprime mortgages. If adopted, it would be the biggest action taken to cope with the unfolding crisis.

The administration was still conducting discussions Friday, trying to work out details of the proposal, which could be unveiled as early as next week. Some indications of the outlines of the proposal may come in a speech Treasury Secretary Henry Paulson is scheduled to deliver Monday to a national housing conference.

The talks have involved all the federal banking regulators and major players in the mortgage industry such as Citigroup Inc., Wells Fargo & Co. and Countrywide Financial Corp.

The major thrust of the proposal would be to get lenders to extend for a number of years the low, introductory rates that were offered on subprime mortgages, loans usually offered to borrowers with weak credit histories.

An estimated 2 million of those initial low, teaser rates are scheduled to reset to much higher levels by the end of next year, pushing the payment on a typical mortgage from $1,200 per month to $1,550, an increase of $350. The concern is that many homeowners will not be able to meet the higher payments, triggering hundreds of thousands of defaults.

That would dump even more unsold homes on an already glutted housing market, pushing home prices down further, jolting consumer confidence and raising the risks of a full-blown recession.

By offering a broad approach to extend the teaser rates for a certain period, homeowners could keep making payments while the housing industry regains its footing.

The administration is working through an industry coalition, dubbed Hope Now, to get the program launched. Elements of the program are expected to be modeled after an approach put forward by Sheila Bair, a Kansas University graduate who is the head of the Federal Deposit Insurance Corp.

Bair’s plan would apply only to borrowers who are current on mortgage payments but unable to afford loans that reset to higher rates.

“We need to have long-term sustainable modifications,” Bair said at a news conference this week.