These are ideas set forth by Jack Rasmus in Z Magazine.

Today’s housing asset price collapse is driven by rising housing supply, the largest cause of which has been rising foreclosures and defaults in the initial phase, but now increasingly determined as well by growing trends in negative equity and unemployment. One in ten homeowners is in foreclosure, delinquent, or in default. Housing supply has consistently risen faster than the demand that banks have been willing to stimulate despite the $3 trillion Treasury-Fed liquidity program. Bankers and lenders have been on a veritable “strike” in terms of lending.

An estimated 5-7 million foreclosures will occur over this cycle. Housing prices have fallen approximately 25 percent. The housing market is nowhere near bottom, and prices most likely will continue to fall by at least another 20 percent in 2009.

Treasury-Fed programs have not addressed this root cause of supply-driven housing price collapse, now spreading from subprime to near prime to prime mortgages, to credit and equity lines, as well now to commercial property loans. Treasury-Fed programs have instead focused on a symptom of the crisis—i.e., deteriorating bank balance sheets driven by the housing asset (and other asset) price collapse. Treating the symptom has not resolved the fundamental problem.

The following measures are thus designed to bypass the banks and lenders, which are now refusing all but token efforts at stimulating loan demand. The problem of collapsing housing asset prices is too central, too critical, and too important to recovery to leave to the whim of bankers and lenders more concerned with hoarding cash and loaning only at excessive rates.

First Measure: Reset mortgage rates for all loans originated 2002-2007.

Second Measure: Reset principle loan balances for all loans originated 2002-07

Third Measure: Create federal homeowner-business loan corporation (HSBLC) to provide direct lending to the homeowner-small business property markets.

Fourth Measure: One year moratorium on all foreclosures and default proceedings

Fifth Measure: Optional homeowners’ 40-year fixed loan extension

Sixth Measure: 15 percent homeowners’ investment tax credit

Seventh Measure: Restoration of Regulation Q

Regulation Q?  Uh huh! While not a direct homeowner item, an equally important provision generating consumption demand is the restoration of Regulation Q. Previously a provision, but repealed in the 1970s, Regulation Q in effect established maximum ceilings above which banks and other credit card lenders could not charge monthly interest. This new regulation would be indexed to the annual core inflation rate in the U.S. economy.