It never ceases to amaze me how much the government reacts, usually overreacts, to things long after they have been done.  Take the subprime mortgage meltdown, for instance.  No reaction until enough turmoil (bloodshed) has developed and after it spilled over beyond the "subprime" sector, which had been forecasted, even by myself.

Now the Fed is reacting, cutting rates by 1/2 percent and scrambling to crack down on abusive and bad lending practices.  Big Ben was speaking before Congress today and stated that the "Federal Reserve takes responsible lending and consumer protection very seriously...We are committed to preventing problems problems from recurring, while still preserving responsible subprime lending."

Does a 1/2 percent rate cut help?  Or will it create more problems.  I will tackle that issue in my next post, but basically it does nothing to help homeowners already in trouble, and may only help marginally for those facing the same issues ahead.

Federal Aviation Regulations (FARs) are said to be written in blood.  Why?  Because they typically were written after a number of people died, or at least seriously injured.  When "enough" people die, the problem draws enough attention to the regulators to decide to try and fix the problem. 

How many homeowners need to die (get foreclosed upon) before the government reacts and implements needed changes?  Apparently we have reached that number, finally.

The problem, just like with the FARs, is that the government tends to overreact, or even underreact.  That is, they tend to tighten regulations too much or not make them strict enough. 

Too tight equates to many professionals simply saying enough is enough and decide not to risk their lives and that of their families over the possibility of breaking the law.  Contrarily, the government may simply act in a way that "portrays" that they tackled the problem when, in essence, they did not do enough to prevent future problems. 

How it all comes together will only be shown in due time.  However, more and more homeowners are "dying" everyday.