U.S. Treasury Secretary Henry Paulson told journalists that the number of potential U.S. home-loan defaults will increase significantly in 2008 as compared with 2007 year.

"The nature of the problem will be significantly bigger next year because 2006 (mortgages) had lower underwriting standards, no amortization, and no down payments," said Paulson.  

"We'll watch carefully mortgages that will be reset," Paulson was quoted as saying.

Paulson was pressing the mortgage-service industry to help a broad range of borrowers become eligible for better loans instead of dealing with mortgage problems on a case-by-case basis.