I posted this early this year but now that the GSEs are under treasury control it is easy to implement. Basically means tetsing for people who can't pay thier mortgages. Sliding scale starting at extending term ending at interest only. In other words based on people's income available to pay mortgage (ie ex other debts expenses) they qualify for a longer term (smaller payment) or worst case IO (with caveat that when prices recover house to be sold or principle starts to be paid. Stop the vast majority of foreclosures and buys the economy time for demand for home to build and prices to recover. Stops the ball that is dragging the economy and financial markets down. The GSEs buy the toxic paper from WS at a discount and implement this program. There may be some more writedowns but not as bad as they would be if something like this to stop the downward spiral isn't implemented.