Speaking to a banking group in Orlando this week, Federal Reserve Board Chairman Ben Bernanke called upon bankers to take "vigorous" measures to "reduce preventable foreclosures by reducing the principal amount homeowners owe." In other words, write down the value of the mortgage to what the market value is currently worth to avoid an even more expensive foreclosure process.

That's because homeowners can't sell with negative equity, and they might be less likely to abandon their homes and continue making the payments if their homes' values are more in line with the current market.

But the same insufficient thinking that got us into this mess could also be the way out, with apologies for a botched quote to Albert Einstein.

Lenders were pretty clever about making up nonsensical loan packages, so here's an idea. How about a new balloon note that only pays off when the home is sold with equity?

Here's how it can work. The lender can create a new loan package for a troubled homeowner at today's market rate, in effect, writing down the difference between the original inflated value and today's deflated value. Let's call the loan a NERB loan, short for Negative Equity Refinance Balloon.

The homeowner gets a new fixed rate note at current market value, and can make payments as long as he or she likes. When it comes time to sell, the bank gets all the equity up to the difference in the original loan and the adjusted loan, plus a reasonable interest rate for having been so nice as to keep the homeowner from defaulting. If the homeowner stays in the home until it's paid off, that day doesn't come until the interest, tacked on at the end, is paid off, too.

It's a win-win for everyone. Prices are still falling, and that's keeping buyers on the sidelines and homeowners stuck in homes they can't afford or can't sell.

The NERB helps keep shaky borrowers in their homes, reduces competing inventory for sellers, gives buyers confidence to get back in the market, and it doesn't penalize those of us who purchased within our means and with good credit.

The banks win, too. They're getting money instead of paying the costs of foreclosure.

Now, how to get the banks to cooperate: I think they could be motivated by an audit from the U.S. Treasury for fraud or the fair housing police at HUD. What these Eliot Nesses could look for are evidence of loans in default where the borrowers were put into subprime loans or given higher interest rates when their credit scores didn't call for it. They can see if some of these loans went to fair housing lightning rods, like single women or certain ethnic groups.

Most banks would agree in a New York second to taking short-term losses now, in favor of keeping the feds out of their business.

All it takes is nerve.