Lower interest rates may not stop house prices falling, nor will they prevent banks from tightening their lending standards.
Sensible intervention cannot even buy long-term relief: the plan cannot stop house prices falling and the bloated financial sector shrinking.
But house prices rising 13 percent in, say Boston, might happen at the same time that house prices are falling by 5 percent in, say, Atlanta (that is not a forecast, by-the-way).
They see house prices still falling and bad loans rising and regions needing financial support.
With house prices still falling, many borrowers would soon have negative equity again.
But when house prices are falling and refinancing is difficult, as is now the case, the option ARM is the financial equivalent of a bikini in winter.
Now house prices are falling, and mortgage rates are rising.
As Mr Mason points out, there is no industry standard for modifying terms and it is not clear how well it will work, particularly at a time when house prices are falling.
Unless job growth picks up substantially, which looks less likely with each passing economic data point, a recession starting from 9% unemployment with house prices still falling will be far more painful than the one we are still experiencing.
How come house prices are falling?
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At the workshop Andrew Lo of the Massachusetts Institute of Technology presented a model of the American housing market, inspired by ABM approaches, which showed how a fateful conjunction of rising house prices, falling interest rates and easy access to refinancing created an awesome burden of debt.
In short, investors are dealing with a new set of complex securities, based on loans to a new type of borrower, where the loan terms and conditions may not be clear and at a time when house prices are falling nationally for the first time in living memory.
But just as rising house prices help to boost spending, so falling house prices can cause economic pain.
Whereas Irish house prices have been falling for some time, the Spanish numbers still show a small annual increase.
The contrast between rising house prices in London and falling prices elsewhere continues to grow.
Falling house prices are anathema in the eyes of the average Briton, or so it seems.
China's banks should also be able to withstand falling house prices better than their American counterparts.
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Mervyn King told business leaders in Leeds he was concerned about rising unemployment and falling house prices.
The plan would not fit with the picture of falling house prices and low demand, it added.
Housing starts are down a surprising 12% with house prices still soft or falling in most areas.
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Rising inflation and falling house prices put pressure on marriages and might thus contribute to higher divorce rates.
America's financial system has two ailments: it owns a huge amount of toxic securities linked to falling house prices.
Falling house prices also mean householders have less equity, excluding these people from the best deals, which require a large deposit.
Almost half had either lost some or all of the deposit they paid on their first property because of falling house prices.
With falling house prices, the risk of default could indeed add 0.75% or more for a newly underwritten and fully documented loan.
However, the majority of surveyors are still reporting falling house prices, with prices expected to continue to fall in the months ahead.
Falling house prices lead to an increase in banks' non-performing loans, and as their collateral shrinks, so does their capacity to lend.
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