There is much controversy in how the remaining half of the funds left over from the 700 billion dollar financial system bail out package should be spent.

The head of the House Financial Services Committee, Rep. Barney Frank, states that Congress will not give any of it to the Bush administration until modifications to the loans that are being distributed have been completed. With over half of the mortgages that were modified during the first quarter of the year of 2008 re-defaulting regardless of the modifications, it appears that something more has to be done.

Lowering interest rates and reducing the monthly payment terms of the loans may be the answer. However, other regulators have determined that the remaining federal money should be focused more on job creation as opposed to loan modifications. The rate of unemployment has risen to an incredible 6.7% and is expected to climb.

Knowing what caused these mortgages to default in the first place could determine the solution in the end.

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