With foreclosures spiking and banks still moving slowly to list repossessed homes in the market, the housing inventory is even bigger than current statistics show. There are a substantial number of foreclosed homes not being listed; this helps in not further lowering the already steeply depressed prices when the inventory goes on the market.

With this, the Federal Reserve is taking measures to help distressed borrower keep homes. The Fed program covers a number of options to provide relief which includes the following: 1) lessen the amount the borrower owes on the mortgage; 2) reduce the interest rate; 3) or prolong the term of the loan.

It is still not clear how many borrowers would benefit. However, a borrower must be at least 60 days delinquent in their mortgage to qualify for help. This is in connection with the setting up of the $700 billion bailout fund which was signed into law last year. The Fed is in charge to take foreclosure relief actions to help arrest foreclosures.

In the letter of Fed Chairman Ben Bernanke sent Tuesday to Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, he mentioned that "The goal of the policy is to avoid preventable foreclosures on residential mortgage assets that are held, owned or controlled by a Federal Reserve Bank."

In a RealtyTrac, a California-based foreclosure listing firm, report, homeowners who faced foreclosure proceedings last year increased 81 percent to 2.3 million compared to 2007 figures. Of this, more than 860,000 properties were repossessed by lenders last year, more than doubling 2007 level. Nevada, Florida, Arizona and California had the highest foreclosure rates last year.

This is the worst housing, credit and financial disaster since the 1930s which have brought the nation into a recession. So far, government programs have yet to show that their actions are able to solve or help curb the problems the nation is facing and provide relief to trouble borrowers.