According to Treasury Secretary Henry Paulson, “Many of today’s unusually high number of foreclosures are not preventable,”. Too many mortgages were allowed to borrowers that could not afford the amount of payment plan developed.“There is little public policymakers can, or should, do to compensate for untenable financial decisions.” Paulson noted that at the start of 2007, foreclosure amounts edged at 1.5 million, but based on analysis done by economists 2008 will kick off with almost 2.5 million.

More and more homes are foreclosing as home values fall and borrowers are left owing more on the home then the current value. Rather then allow the deficit to grow, fearing that the prices will fall even more, the borrowers are calling quits. This adds more unsold homes to those already left on the market, bringing home prices down even more.

Borrowers are also losing their homes when their initial low mortgage rates come due for the high reset rate and they can no longer afford their monthly payments.

The Bush administration has been trying to work on preventable foreclosures, where the homeowners want to keep their home, and have the financial ability to do so, with some assistance. This is where Hope Now comes in, an affiliation that works with the Bush Administration to help convince lenders to employ loan modification or refinancing to allow these preventable foreclosure candidates to keep their homes. Paulson applauded these efforts, “While there have been bumps in the road and there is still work to do, the industry, through Hope Now, has made an enormous effort and great progress toward meeting these challenges,”. From last July to date, Hope Now has assisted over 1.7 million homeowners to keep their home.

Congress is also trying to bring about a new legislation that would let the FHA create new/cheaper mortgages for the owners who might have problems refinancing into a more stable government insured loan. With this, lenders would be taking a big loss, as they would be reducing the amount owed on the loan.