The most significant and some say extreme solution thus far came when the Federal government assisted JP Morgan with the purchase of Bear Stearns for $2 per share. One of the most discussed solutions has to do with baling out the mortgage lenders and assisting borrowers. There are several different remedies that have been proposed. These remedies include everything from a moratorium on foreclosures to the freezing of interest rates.

As it pertains to the mortgage companies it has been suggested that limits should be lifted so that companies can purchase jumbo housing loans. According to one article this type of mortgage relief could help staunch the hemorrhaging in high-priced housing markets...where buyers have had difficulty getting loans and are paying interest rates a full percentage point higher than the 5.5% average rate on smaller loans backed by the government enterprises... The boost to the economy from the mortgage provisions ultimately could exceed the lift from the package's $150 billion of tax cuts and rebates by contributing to a major refinancing boom that began with a steep drop in interest rates this year..."It could do a lot to unfreeze the mortgage market," said John Rutledge, an economic consultant and former Reagan economic adviser, calling the increases in conforming loan limits from the current $417,000 to as much as $729,000 in high-priced areas "the most powerful medicine in the package ("Jumbo Loans...

The research found that the sub-prime lending practices of many financial institutions are a major cause of the crisis. The research found that the Federal government has proposed several solution including assistance for homeowners and assistance for lenders. Overall the research concluded that Inflation, deregulation and financial mismanagement are the major causes for the current Savings and Loan crisis, but the government has proposed potential solutions.
Works Cited

Jumbo Loans Spell Relief; Analysts See Economic Fix. (2008, January 29). The Washington Times, p. A01.

Kuttner, R. (2007, October). The Bubble Economy: The Financial Meltdown Is the Logical Consequence of Deregulation. Will We Reverse Field in Time to Prevent Another 1929?. The American Prospect, 18, 20+.

Peterson, J.R. (2005). Designer Mortgages: The Boom in Nontraditional Mortgage Loans May Be a Double-Edged Sword. So Far, Most Banks Have Moved Cautiously. ABA Banking Journal, 97(10), 30+.

What is the real definition of inflation?." Retrieved May 8, 2007 from; http://www.inflationdata.com/Inflation/Articles/Definitions.asp

Subprime lending. Retrieved May 8, 2007 from; http://www.hud.gov/offices/fheo/lending/subprime.cfm