The NY Times calls for a bottom-up approach and this WaPo article says some economists (it doesn't give numbers of how many) advocate that the government buy up individual mortgages. Either approach would be a radical shift from what we're hearing from Congress, either the modified Paulson plan the Democrats negotiated yesterday or the completely whacky capital-gains proposal from the recalcitrant Republicans.
I'm not sure the NY Times is right when it says the whole mess can be cleared up by throwing open bankruptcy courts to homeowners who can't make their mortgages and the cost would be zero. Some, possibly many, still may not be able to make their payments.
So instead the government should guarantee individual mortgages if the homeowner declares bankruptcy and has to walk away (or, let's face it, chooses to walk away). But this gives people the chance to restructure their debt and keep their homes, and it provides cover for mortgage backed securities, which, apparently, are the cause of this whole mess.
Something like this smells a heck of a lot better than bailing out banks and Wall Street firms while the vast middle-class continues to grind along under today's conditions. As for the capital-gains cut proposal that McCains newfound friends on the Hill are proposing, that's just stupid.