Acting too late?

The federal government displays an amazing ability to attack problems long after they’ve largely become too severe to fix.

We’re seeing this talent now with the government’s attempts to somehow solve the nation’s mortgage crisis.

If you’ve been paying attention, you know that the number of foreclosures on mortgage loans hit a record high during the fourth quarter of last year. You also know that many are blaming bad mortgage loans for the problem: Lenders gave loans to people who couldn’t afford them, doing so by offering mortgages that came with artificially low initial interest rates. Once those rates adjusted to their normal levels, resulting in far higher monthly payments, borrowers could no longer afford them.

On March 13, a committee of economic policymakers, led by U.S. Treasury Secretary Henry Paulson, released a report offering solutions to this problem, and, hopefully, ideas to prevent any other mortgage crisis from happening in the future.

Among the recommendations: A uniform nationwide licensing standard for mortgage brokers, more oversight of mortgage lenders from state and federal regulators and more accountability from credit-rating agencies. You can read about the group and its recommendations here at Portfolio.com.

The problem is, the committee and its report did little to offer relief for homeowners now. And that’s a shame. Perhaps Greg McBride, senior financial analyst at Bankrate.com, summed it up. He was quoted in the same story as saying the recommendations were like putting up a traffic light after an accident had already taken place.

We shouldn’t be surprised, though. That’s largely, it seems, what governments do.