Billions of dollars have already been earmarked for people who got into trouble with subprime loans. The plans are risky, because administrators will be hard pressed to bail out the unfortunate borrowers who signed their lives away without rewarding the lenders who made the bad loans.

The subprime bailout plans are also fuzzy, because even as money is being thrown about, very few people know where it is actually going, or how it will solve the original problem.

Congress is currently working on hearings and regulators to determine what type of action is needed, and how it will be implemented. Some of the ideas currently being presented include taxpayer funded bailouts and tighter lending regulations.

The Government Accountability Office has been asked to investigate the foreclosure surge to determine exactly what is behind it. Congress seems to think that there could be other factors besides aggressive borrowers and lenders contributing to the foreclosure crisis.

Very little, however, has actually been settled. Here is what is known for certain at this time:

• Freddie Mac and Fannie Mae have set aside $20 billion worth of new financing for borrowers who have a subprime loan and need help staying in their homes. Known as HomeStay, the program will allow borrowers to refinance into a 40 year fixed rate mortgage. The financing is expected to be rolled out mid-summer.
• U.S. Senator Charles Schumer (D-NY), chairman of the Joint Economic Committee proposed legislation this month that would offer $300 million in new federal funds to non-profit organizations to help prevent foreclosures.
• At the state level, more than 100 different bills have been proposed to combat subprime foreclosures and prevent predatory lending practices.
• Pennsylvania has announced measures that include using $25 million garnered from bonds and tax revenues to help homeowners with adjustable rate mortgages and falling home values.
• Ohio will sell $100 million in bonds to allow 1,000 borrowers facing foreclosure to refinance into a 30 year fixed rate 6.75 percent loan.
• Minnesota will spend $11 million to purchase foreclosed properties that can be sold to low income individuals.

Why Now

An increasing number of foreclosures and the further deterioration of the subprime lending market may have finally managed to garner attention from policymakers, but the question that begs to be asked is why now? Why not months and months ago when everyone from bloggers and journalists to the everyday homeowner noticed that there was a problem with the way people were financing homes?

Critics say that if some attention had been paid to the matter then, talk of a bailout for subprime mortgage victims wouldn't be necessary now. Of course, there is no way to determine whether or not the belief is true at this point, but the criticism does sound logical.

Perhaps lawmakers held back in hopes that the problem would work itself out, or perhaps coming elections have helped to give them a kick in the pants. Whatever the case may be, there is one thing that is for certain. We have a huge mess on our hands--a mess that seems to tragically follow suit with what has become standard American policy: buy now, pay later.