Bankruptcy attorney: Bailout doesn't help housing problems

Two related, but distinct, economic crises are facing America as Congress prepares to vote on a $700 billion plan to stabilize the economy, according to Phoenix bankruptcy attorney Diane Drain.

There's the liquidity crisis on Wall Street and then there's the housing crisis, said Drain. She doesn't believe the real estate issues are being covered in the Wall Street bailout plan.

"I don't think that they're looking at real estate values and stability at all," she said.

"It has to be addressed. We're ignoring the elephant sitting in the middle of the living room."

To help fix the housing crisis, Drain said lenders are going to have to modify subprime loans down to fair market value.

"The homeowner has to be able to afford the mortgage payments that are reasonable mortgage payments," she said. "Otherwise, we are just simply repeating our history here."

Subprime loans "have to be modified in such a way that there are long-term results, not short-term," said Drain.

She said lenders need to continue to look for new ways to keep homeowners in their homes.