Paulson talked about the importance of preventing foreclosures now but concluded, "Under the worst conditions, you would be . . . going through a modification or a refinancing program. But we'll have five years to deal with it."

And there you have it, folks. That's been the problem all along.

We are in this predicament because homeowners were told not to worry about their ridiculously low interest rates because they could refinance later before the rates reset. Or they were delusional in thinking they could afford future rate increases if they couldn't refinance.

Don't worry. Be happy.

Well, people aren't happy now.