President Obama has proposed a program in which the government would raise mortgage industry payments if lenders would absorb more losses on underwater mortgages. The Wall Street Journal notes that the idea raises the ante for Fannie Mae and Freddie Mac's overseers to keep fending off the concept.

The Journal's Alan Zibel also notes that a different proposal would use "forbearance" program to set aside part of a mortgage's principal balance so the homeowner could pay off the rest olf the principal and deal with the set-aside amount after that or after a sale.

The Federal Housing Finance Agency has fought the idea of eating losses on mortgages its wards guaranteed. That "has been the subject of intense frustration to advocates of a more aggressive response to the housing crisis," Zibel wrote.

FHFA, which has staunchly said its job is to avoid loses for the two bankrupt entities, issued a report recently analyzing the effects of various options. "The regulator indicated its preference for a principal forbearance plan, which does not require lenders to forgive debt," Zibel said.

Write-downs have strong opposition. The Journal quoted Sen. Bob Corker, R-Tenn., as saying he would write legislation to bar them because "people who acted responsibly in Tennessee will be paying for the bad behavior of lenders and borrowers in places where reckless housing practices were most prevalent, something I find to be irresponsible.”