Well after the housing bubble burst, and after millions of foreclosures and homeowners have struggled to come up with their mortgage payment, one government entity is finally weighing in on the current housing crisis. The Federal Reserve issued a paper encouraging aggressive action to start to end the crisis before us.

The Chairman of the Federal Reserve, Ben Bernanke, addresses the House Financial Services Committee through the paper, suggesting that they work to provide incentives for lenders to modify mortgages rather than foreclose on homes of millions of more Americans.

Many people have fallen victim to aggressive and controversial lending practices by banks, now they are faced with a tough choice or sometimes no choice on how to deal with their situation. Now, every American is being affected by this crisis, some directly, but many also indirectly. Home values have decreased drastically in recent years and home sales have come to a nearly screeching halt in many areas of the country.

Since the standard of foreclosing on a person's home when they become delinquent on their mortgage doesn't help the banks or the homeowners, the Federal Reserve is encouraging Congress and banks to work to change this standard. The chairman also suggests banks should try an approach called "deed-in-lieu of foreclosure," in which homeowners turn their homes over to the banks and then rent the property from the bank, preventing foreclosure and allowing the homeowner to remain in their home.

These suggestions will hopefully lead to incentives for banks to work with people facing foreclosure. Unfortunately, going through a foreclosure or working to avoid it can be a bumpy ride. Working with an attorney who is experienced in foreclosures can help address your unique situation.

Source: The Huffington Post, "The Federal Reserve Discourages Foreclosures," Anna Cuevas, Jan. 9, 2011