But when arrogance, avarice, and just plain stupidity permeate and stigmatize an industry of vital importance to the health of our nation’s economy, then government must step in and take charge. Such is the case in the home loan industry.

President Barack Obama understands. From the February 2, 2009 issue of Newsweek magazine: “As President Obama has often pointed out, until the housing market stabilizes, the crisis will continue.”

FDIC Chairman Sheila Bair understands. She said, “[The recession] started in housing and will end with housing.”

The first and most important task needed to reverse the recession is to end foreclosures, thereby reducing the inventory of homes for sale and stabilizing the housing market.

In 2006, Americans lost 268,532 homes through foreclosure. In 2007, foreclosures had climbed to 405,000. For 2008, the number is approximately one million.

Many foreclosures in that round were caused by loans unaffordable from the beginning—the direct result of predatory lending to subprime borrowers. Those foreclosures glutted the real estate market with a housing supply overhang, which had a ripple effect on our nation’s economy and initiated the current recession.

Another wave of foreclosures will follow in 2009 with Alt-A, Option ARM, and Jumbo mortgages.

As the recession drags on, defaults will be exacerbated by rising unemployment. Already, 10 percent of Americans are behind on their home loan payments. If nothing is done, in the next four years eight million more loans will be foreclosed and homeowners put on the streets.

Our government must take daring, unprecedented, even unorthodox measures to eliminate or sharply curtail foreclosures of single-family owner-occupied residences.

Bailing out the mortgage industry with a large infusion of cash is not the answer. A bailout would merely serve to reward companies for policies and behavior that, directly or indirectly, caused the toxic loan problem. As we’ve already learned, little or none of the bailout money will trickle down to the borrowers or alleviate the foreclosure problem.

Rather than throw good money after bad, government resources must be concentrated on permanent, viable solutions. What’s needed is a program that works at the grass roots level—not merely to make monthly payments more affordable, but to stop foreclosures; keep homeowners from being evicted, regardless of creditworthiness or current income; and reduce the inventory of homes for sale.

FHA’s HOPE for Homeowners plan, enacted by the 110th Congress in 2008, was heralded with much fanfare; but, it is not the panacea it was hyped to be. Although H4H can reduce monthly payments for a small number of creditworthy homeowners who have enough cash available to participate in the program, it has fatal flaws that prevent it from helping borrowers on the verge of foreclosure.

To start, H4H requires participation of the lender, and many lenders won’t sign on to the onerous plan.

Investors further complicate the matter. Their approval for the refinance will be difficult or impossible to obtain if the borrower’s loan—like a great many—had been pooled and bundled into a mortgage-backed security.

Former Secretary of Housing and Urban Development Steve Preston says the H4H plan is a failure. Preston stated that only 312 applications for refinancing have been filed, though hundreds of thousands were expected.

Preston blames Congress for making the program unwieldy and difficult for borrowers, saying: “This program was designed to the detail by Congress. Congress dotted the i’s and crossed the t’s for us, and unfortunately it has made this program tough to use.”

I’m reminded of the maxim that a camel is a horse designed by committee.

Congressman Barney Frank faults the Bush administration. He’s probably right, but at this point in time pointing a finger at Dubya is like beating a dead horse. Or, a dead camel.

FDIC Chair Sheila Bair came up with a program that’s being used with modest success at IndyMac, the failed California bank. But that plan also has major shortcomings, and it will not stop most foreclosures.

There is an answer. It's a proposed program called Partners in America. PIA will avert foreclosures by restructuring unsustainable home loans to make them affordable, regardless of the borrower’s credit or income, regardless of the property's value.

Partners in America is neither a bailout nor a handout, but an entirely new approach—a quid pro quo arrangement that partners homeowners with the United States government to their mutual benefit. It’s a bold, daring, unorthodox plan that will virtually eliminate foreclosures.

Unlike HOPE for Homeowners, Partners in America does not require lenders’ cooperation in the program. If necessary, properties being refinanced can be obtained through eminent domain.

Complete information about Partners in America is available online at www.partners-in-america.com. Click on the link to download PIA. Be sure to read both pages of the website for a complete understanding of the program. Then, contact your senators and congressman and urge them to replace the failed H4H with the Partners in America Equity Loan Program.