Dec. 5 (Bloomberg) -- Wall Street encouraged reckless mortgage lending that led to a national foreclosure crisis, Democratic presidential candidate Hillary Clinton told an audience at New York's Nasdaq stock exchange.

Clinton focused on the fallout from defaults in the subprime mortgage market, saying the financial industry packaged loans in a way ``that common sense warned would end in foreclosure.'' She said she disagreed with the idea that Wall Street simply helped distribute the risk for such mortgages.

``Wall Street shifted risk away from the people who knew what was going on and onto the people who didn't,'' Clinton said today. ``Wall Street helped create the foreclosure crisis, and Wall Street needs to help us solve it.''

Clinton, 60, reiterated her call for a 90-day moratorium on foreclosures for homeowners with subprime mortgages, a five-year freeze on the monthly rate for subprime adjustable loans and a requirement that the mortgage industry report how many loans it modifies. Clinton described the proposals in a letter to Treasury Secretary Hank Paulson earlier this week.

Federal regulators and U.S. lenders are poised to announce an agreement that includes a five-year freeze on interest rates, a person familiar with the measure said.

Clinton's speech at the Nasdaq follows a similar appearance by her main rival for the Democratic presidential nomination, Illinois Senator Barack Obama, in September. Obama, 46, said the subprime mortgage crisis had arisen from a lack of transparency, honesty and accountability in the marketplace.

Wall Street is part of Clinton's constituency as a U.S. senator from New York, and she gets a large share of her political donations from investment banks. Her supporters on Wall Street include Citigroup Inc. Chairman Robert Rubin, Goldman Sachs Group Inc. Chairman and Chief Executive Officer Lloyd Blankfein and Morgan Stanley Chairman and CEO John Mack.

To contact the reporter on this story: Kristin Jensen in Washington at kjensen@bloomberg.net

Last Updated: December 5, 2007 17:36 EST