There are many who consider the government to be at a great deal of fault for the housing bubble that eventually burst and sent the economy into a tailspin. People have repeatedly said that the U.S. government’s strong promotion of homeownership – which included subsidies and easy financing regulation – helped grease the skids for the decline of the housing industry.

It also seems as though people have an attitude about government’s role in housing that goes something like “You’ve done enough already, now stay out of it.” But the better attitude might be “You were part of the problem, now be part of the solution.” It seems inevitable, after all, that the government will maintain some role in housing, no matter what. It may as well be a productive one, helping the industry get out of its doldrums.

There are signs that this is the case. The changing of the underwater cap in the HARP program, for example (see the article above). Also, last week the senate passed a measure that would re-raise the limit for conforming loans back to $725,000 from the $625,000 it

dropped to earlier this month. It would seem as though the government recognizes that as homeowners feel more secure about their housing situation, the better it is for the overall economy.

Of course, there have been mistakes made. Foreclosure programs that were meant to help struggling homeowners stay in their homes haven’t been that effective and, in some cases, simply delayed the inevitable. Some will argue that discouraging banks from foreclosing on homes has dragged out the process, creating a backlog of distressed homes that could put downward pressure on prices for months or years.

But the reality remains that when people are more secure, they spend more, which boosts the economy. If you look at recent numbers, when homeowners have refinanced to lower rates in bunches, it has corresponded with upticks in consumer confidence and in retailers’ earning results. This fact is not lost on lawmakers or the administration.

I’ve written before about helping fix the housing industry as the first step toward improving the overall economy. A healthy housing industry is typically one of the things that leads a country out of a recession. It hasn’t so much in this one because it’s an industry that’s grinding along, rather than humming. Dollars are generated, jobs created and progress made when the housing industry is healthy. At least the government seems to recognize this.

Critics will still argue that the government should keep its hands off. But with Fannie Mae and Freddie Mac in government receivership, taxpayers are already on the hook for those institutions. With cash flow tight for many households, eliminating the mortgage interest tax deduction would be risky to the economic recovery, too. While it’s true that the government shouldn’t meddle with the market so much that it messes things up worse, it does make sense to help when it can.

It really doesn’t matter where your politics fall – more government, less government; more programs, fewer programs – you likely agree that there are parts of the country where the housing industry needs SOME sort of pick-me-up because it’s dragging down the overall recovery and creating a perception that real estate is bad all over. Both are risky to an economy that is trying to make a comeback.

Should it be the government’s role to promote homeownership? No matter what your answer to that question is, you should be able to see that the horse is already out of the barn when it comes to that. And if you believe that the government’s role was part of the problem, don’t you think that it has a responsibility to also be part of the solution?

Foreclosures were up in the third quarter this year compared to the second quarter. The increase was less than 1 percent, according to foreclosure listing firm RealtyTrac, but more significant is the fact that the number rose after three straight quarters of declines. Lenders who slowed the process down beginning last fall, when the “robo-signing” scandal hit, seem to be renewing their foreclosure efforts.

“This marginal increase in overall foreclosure activity was fueled by a 14 percent jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months trying to clear the chimney of sloppily filed foreclosures, RealtyTrac CEO James Saccacio said in a news release.

Still, it doesn’t seem as though the process is moving all that much faster – according to RealtyTrac, U.S. properties foreclosed in the third quarter took an average of 336 days to complete the foreclosure process, up from 318 days in the second quarter and the highest number of days going back to the first quarter of 2007.