Remember the pictures from the Great Depression? Homes foreclosed by the thousands and entire communities forced to move out West to start a new life. Nobody ever though it could happen again--well it is, except there is no "out West" for people to escape to.

Despite all the hoopla about foreclosure hot lines and initiatives such as Project Hope, these efforts at assisting delinquent homeowner's has had a negligible impact on foreclosure outcomes. According to a study by the "State Foreclosure Prevention Working Group," as reported by the Wall Street Journal, 70% of seriously delinquent borrowers aren't receiving any help with their payment problems.

On Tuesday Federal Reserve Chairman Ben Bernanke called on mortgage lenders to “find effective responses to the increases in delinquencies and foreclosures.” His proposal to reduce the loan principal has met with lukewarm reception by lenders. Loss-mitigation arrangements such as principal reductions, interest rate reductions and loan extensions are advantageous to lenders because the foreclosure alternative is extremely expensive. Chairman Bernanke said that lender lose in excess of 50 percent of the principal balance by pursuing foreclosure.

The credit crisis is severely contracting the amount of money available for mortgages. Homeowners facing foreclosure are unable to sell their homes prior to actual foreclosure because of a lack of buyers with financing. The bill...

The house passed H.R. 3915, the controversial Mortgage Reform and Anti-Predatory Lending Act by a vote of 291-127. Rep. Barney Frank said: "What we have today is a bill that canot undo what happened, but makes it much less likely...

On November 7, 2007 the House Committee on Financial Services approved the Mortgage Reform and Anti-Predatory Lending Act of 2007 (HR 3915). This bill, sponsored by Re. Bradley Miller [D-NC], does the following:

Homeowners having difficulty with their mortgages are told they must be in arrears on their payments before the lender will consider a mortgage modification or other foreclosure relief. This means that...

There has been much talk about the "moral hazard" of bailing out foreclosed homeowners. However, many struggling homeowners are relatively unsophisticated...

Consider this hypothetical. Your neighbor is facing foreclosure. His house looks like a great investment opportunity but, unfortunately, you don’t have the money to make a deal. However, a friend has told you he is hoping to invest some of a recent inheritance in foreclosed homes. You offer to connect your neighbor and friend to work a deal.

The FHA has been around for many years, but during the heyday of subprime lending it was essentially forgotten. Nobody seemed to worry about security, guarantees or insurance a few years ago. The FHA has always been a refinancing option for borrowers, particularly subprime borrowers. Because it pays the lender if the mortgage borrower defaults, it can provide protection and stability to lenders.