Last week Gov. Jim Gibbons and Assembly Speaker Barbara Buckley, D-Las Vegas, put the escalating problem under the spotlight.

Gibbons called for an Oct. 4 economic summit on housing, and Buckley convened a special subcommittee on mortgage lending.

Thus far in 2007, Nevada has been ranked No. 1 in the country in the number of foreclosure filings per household.

Many homeowners face foreclosure because they took out adjustable-rate mortgages that have since adjusted to higher interest rates, increasing their monthly payments to a point they can't afford.

Other foreclosures have resulted because speculators counted on continuing appreciation, only to have the housing market slow, and prices stagnate or drop.

The sudden push by state officials to deal with foreclosures and the housing slowdown comes on the heels of recent federal action, including the Federal Reserve Bank last week lowering interest rates by one-half of one percent.

In addition, the House approved a bill to help homeowners get out from under their adjustable-rate mortgages a week after the Senate banking committee did the same.

In August, President Bush announced an initiative to help homeowners refinance their mortgages with government-backed loans.

Gibbons, who spoke during a breakfast meeting Sept. 20 at the Four Seasons to members of the Nevada Development Authority, announced the summit would bring together the top five lending institutions in the state to determine the scope of the problem and identify solutions.

The fallout from foreclosures has tightened credit nationwide and made it more difficult for even those with good credit to get loans unless they put down a larger down payment or pay higher interest rates. That has reduced the pool of buyers for homes at a time Las Vegas has record level of inventory on the market.

"Nevada can't rely on national monetary policy to address our state's housing challenge," Gibbons said. "It is time for us to meet this challenge head on."

What the state will do or can do remains to be seen.

Buckley has urged the new subcommittee to consider restructuring state programs to use existing funds to provide loans to help homebuyers refinance their homes. In addition, she suggested using more than $1 million in surplus funds from the state Mortgage Lending Division to create classes for homebuyers to discuss options when buying or refinancing a home.

Buckley said state action is needed to prevent the housing crisis from hurting the economy.

But the speaker said she's against bailing out investors who contributed to the problem in the first place with a massive taxpayer bailout at the federal level, given that many people have been prudent and are saving for a down payment to buy a home.

Buckley noted that it is not a bail out at the state or federal level to help first-time homebuyers who were sold a predatory loan by mortgage brokers looking for higher commissions when they could have received a more conventional loan.

"I think it would be wise to allow them to refinance," Buckley said. "It would not be a taxpayer bailout to allow them to have access to capital that they can repay on reasonable terms."

The proposed federal legislation targets homeowners who took out interest-only or adjustable-rate mortgages. Homeowners could refinance their loans with FHA insurance and obtain mortgage insurance for jumbo loans of $417,000 or more.

In his speech, Gibbons talked about how foreclosure filings have more than tripled since last year and pointed out that during the first six months of 2007, Las Vegas had one foreclosure filing per 31 households.

Gibbons said that it is troubling that the problem will worsen because weakness in the residential market affects consumer spending and taxable retail sales.

The housing slowdown has also cost jobs in the construction business in addition to cuts in the mortgage, real estate and title insurance industries, he said.

Some of the problems are the ebb and flow of a free market, but Gibbons said the state must help protect the wealth of businesses and families.

"Foreclosures are putting downward pressure on home prices," Gibbons said. "In Southern Nevada, home inventory is at historic levels and 46 percent of those homes are empty. That is negatively impacting home values. For every one percent decline in housing prices, that costs single-family residential property owners $800 million."

Those in the Las Vegas housing industry are closely monitoring the actions of the federal and state government. There are mixed feelings about how far government should go in helping those who take out loans they can no longer afford.

"I think the government should help out, but not bail out investors," said Brian Plaster, the president of Signature Custom Homes. "They should only help homeowners who got duped by teaser rate mortgages from bad lenders."

Reducing the number of foreclosures would help the housing industry, Plaster said.

"There would be less inventory on the market and less downward price pressure," he said.

Michael Krein, president of the National REO Brokers Association, handles foreclosures in Las Vegas.

Krein said he believes in letting the market readjust on its own without a bailout. Most of the foreclosures he handles involves speculators and the homeowners who got hurt are adults who should have known better.

"If you bail out the market with cheap financing, prices stay artificially high," Krein said. "Just let the market readjust and people will be able to afford a home again."