Dean Baker has the latest on the economy in the meltdown lowdown:
A new bill sponsored by Rep. Barney Frank, chairman of the House Financial Services Committee, directs the Federal Housing Authority (FHA) to buy up loans that are facing foreclosure. If the bill passes, the FHA will guarantee new mortgages at a price 15 percent below the current appraised value of the house. This would require the current lender to take a hit, since it will not get back the full value of the home, but even 85 percent of the full value of the home is likely more than the lender would get by foreclosing. In principle, homeowners will also benefit, since they get to stay in their home with a new lower-interest mortgage.