Mortgage Crisis: Solutions?

My friend Bob Cringely is trying to find solutions to the mortgage problem. I am out of my depth on the topic but am also trying to understand, seek solutions.

My instinct is to not reward people who acted irresponsibly – people who should not have bought out-of-their-reach homes by creating vehicles with which to afford those.

Ideally, the communities with foreclosures will get back into the mode of creating jobs, so that people can afford to buy (or preferably rent) homes. But that will take time. And that long-term, sustainable solution is where I am spending most of my energy: entrepreneurship, business creation.

Meanwhile, how do we stabilize the system? How do we deal with the housing nightmare?