In truth, foreclosure prevention is just of one of many moving parts in this bill. It includes a program that allows the Federal Housing Administration (FHA) to guarantee refinanced mortgages in which the lender writes down the loan amount to 85% of the borrower's loan principle. An estimated 400,000 homeowners will be assisted by this program.

The bill also provides $180 million for foreclosure prevention counseling and legal services.

But the dominant aspect of the bill of course establishes a temporary line of credit and a stock investment in Fannie Mae and Freddie in order to stabilize them, while creating a independent regulator for government-sponsored entities (GSEs). Other features include raising loan limits of GSE loans; minimum standards for mortgage licensing and a registration system for brokers; $4 billion in Community Development Block Grant (CDBG) funds to help cities and states acquire and redevelop foreclosed and abandoned property; and tax credits for first-time homebuyers.

In short, there is very little that is actually wrong with the legislation. It addresses, in a limited way, affordable housing needs, as well as the effects of the foreclosure crisis on neighborhoods. It brings much needed, although perhaps not enough, reform, regulation and modernization to the administration of GSEs. And by keeping Fannie and Freddie afloat, Congress has ensured that mortgage credit doesn't completely dry up.

400,000 homeowners avoiding foreclosure is nothing to sneeze at. However, considering that the FHA guarantee program is entered into voluntarily by lenders, contains tight restrictions, and doesn't take effect until October (18 months after the crisis hit full stride), this legislation does too little for the millions of homeowners are in deep financial distress as a result of abusive mortgage underwriting. Particularly maddening is Congress's abandoning of a proposal to give bankruptcy judges the authority to demand loan modifications from lenders.

The federal government was able to act boldly and with urgency in order to come to the rescue of the capital markets – such as the Fed's line of credit to investment banks, the bailout of Bear Sterns, and stabilization of Freddie and Fannie. Unfortunately, homeowners have simply not figured as importantly in the eyes of our government.