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Most of the foreclosures that have sunk the housing and banking markets were the product of badly written loans whose backdated term increases ballooned on homeowners as the market's boom cycle expired and left them holding the bag. No matter where you pin the blame, on the homeowners or the underwriters, the banking and mortgage crisis resulted from these badly written loans.

Bailout money allocated to the banks failed to dent the sagging lending power of these banks, as bank still reel from the fallout of past foreclosures, as well as foreclosures that continue to happen as you read this. They can't afford to continue giving out loans while they're still taking the damage from previous failed loans.

The recent Federal Stimulus package will only have a token effect on consumer confidence. Mass layoffs continue, driving unemployment to their highest levels since the economically treacherous 1970's. People who retain their jobs will remain afraid to spend because they don't know if they'll even have a job in a few months. And of course people will lose their jobs, and suddenly find themselves unable to land a new job, make ends meet and, ultimately, pay their mortgage.

Even if workers keep their jobs, they may barely make ends meet under the current terms of an adjustable rate mortgage. Once the terms balloon, keeping up may prove impossible, producing even more foreclosures.

President Barack Obama cannot restrict his address of the nation's economy to tax breaks, public works projects and health care. The nation's lenders and homeowners will continue to reel under the specter of irresponsibly written mortgages. The Federal Government needs to bail out homeowners struggling to avoid foreclosure.

Now, this doesn't mean the Federal Government should just pay off these mortgages. That would be completely unfair to homeowners who paid off their homes themselves, and unfair to the struggling homeowners themselves, essentially offering them a welfare handout for their own questionable decision making. However, there are three things the Federal Government can do to bail out homeowners and get them back on track:

1) Pay off delinquent and past due principal and interest payments for all mortgages verging on defaults and foreclosures. Hit the reset button. Sure, some of these people just weren't responsible with reasonable loans, but some have made an honest effort to pay a loan given to them dishonestly by a predatory lender.

2) Restructure the terms of all ARM and Interest

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