As late in the game as it may be, Paulson began to address bringing down mortgage interest rates for new home buyers by suggesting the Fannie Mae (FNM) and Freddie Mach (FRE) could be used to push their level to 4.5%.

Today, Bernanke moved his attention to the related topic of foreclosures, finally beginning to address the reality that without stable housing prices, there is no economic recover.

According to Reuters, Bernanke commented that "Principal write-downs may need to be part of the toolkit that servicers use to achieve sustainable mortgage modifications."

He added that there were several options for attacking the problem including the FDIC sharing lender costs with banks in restructuring loans which are in default and "a program aimed at putting delinquent borrowers into new home loans insured by the Department of Housing and Urban Development’s Federal Housing Administration ."

Unfortunately, as the Fed, FDIC, and Treasury spend a great deal of time thinking about their options without doing anything, default rates and foreclosures continue to rise.

Douglas A. McIntyre

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