CBO (Congressional Budget Office) released a paper on policy options for the housing and mortgage markets. The paper discusses about the federal involvement to improve situation and removing obstruction to private mortgage restructuring by providing federal financial support.

In the discussion they mentioned:

Current economies get fragile mainly due to difficulty in mortgage market and finance industry. It arises from falling of house price which affect consumers by housing wealth and lenders with the loss of collateral.

A large number of foreclosures also reduce the house demand. Direct federal provision/ credit guaranteeing to mortgage program may help avoid foreclosures and help the market in coming up.