Because of the slow progress of the government foreclosure prevention program and the continued foreclosures in many parts of the country, various groups have been calling out for more aggressive intervention.

Even the lawmakers who had rejected the bankruptcy revamp legislation which could have helped accelerate loan modifications had written to Treasury Secretary Geithner to step up his efforts in getting more mortgage lenders to make more loan modifications, especially banks bailed out by the federal government with billions in taxpayer money.

There had been many analysis and studies about the causes of the current foreclosure crisis and the progress of the government foreclosure prevention and mitigation program.

One recommendation is from Allan Mallach, a fellow at the Brookings Institution and the National Housing Institute. He suggested a combination of federal, state and local efforts, but with focus on local governments. He studied the case of Phoenix, one of the cities most battered by foreclosures and bargain home prices.

He said that Phoenix homes previously listed at about $250,000 are now being sold at only $90,000. He said that this situation should be taken advantage of by the federal government foreclosure prevention program or by local governments and nonprofit agencies.

Mallach said that responsible and financially capable investors should be helped and allowed to buy distressed foreclosure homes and then rent them out to the previous owners of the repo homes – the same families whose mortgages were foreclosed.

Mallach said this remedy solves several problems: families are not forced out of their homes and thrown into homelessness, houses are not left vacant to soon be dilapidated and cause community blight, and home prices will not go down further to cause more foreclosures.

Additionally, Mallach said, investors are willing to let the former owners rent the foreclosure house because they do not have to go out and look for qualified renters. He insisted that there are plenty of responsible investors.

In addition to the contribution of investors to the government foreclosure mitigation program, local governments can implement the type of mandatory mediation being implemented in Philadelphia in cooperation with a national nonprofit agency. Mallach said the Philadelphia mandatory mediation program has achieved a significant level of success because the mediation process does not take a long time to complete.

On the whole, Mallach said, smaller-scale targeted solutions to the foreclosure crisis could be more effective in resolving the crisis and in helping the federal government foreclosure mitigation program.