The new bailout package approved Friday by Congress and President George W. Bush will only help in the short-run, not permanently cure the foreclosure crisis that is at the heart of the financial sector meltdown, according to the Center for Responsible Lending (CRL) Monday.

The bailout bill, designed to allow the federal government to buy up $700 billion of bad loans from major mortgage bankers, also provides for government resources to “implement a plan that seeks to maximize assistance for homeowners” once it acquires those soured home loans. Yet those at the CRL believe the bill’s language is not strong enough or specific enough to stem the tide of raging foreclosures.

“Any plan that fails to stop foreclosures will ultimately fail to fix the crisis,” said Michael Calhoun, president of CRL. “Wall Street firms and banks caused a massive foreclosure crisis in this country, and this bailout provides no meaningful way to end it. It doesn’t stop the epidemic of foreclosures that will continue to drag down property values for everyone.”

It is estimated that more than 6.5 million homeowners will lose their homes to foreclosure in the next few years. The CRL says that roughly 40 million homeowners in surrounding neighborhoods will also be affected as their property values will be negatively influenced by those vacant houses falling into disrepair.

Steven Adamske, spokesman for the House Financial Services Committee, however, says the new bill will make it easier for the government to stop foreclosures, especially when lenders are uncooperative. “If servicers are an impediment [to loan workouts] we can take another look at the industry next year and see if there are other actions we can take to remove roadblocks,” Adamske said. “…The government is here to help. We want to rebuild neighborhoods from the ground up.”

Still the CRL folks remain unconvinced. “Existing programs to modify mortgages can’t and won’t help enough homeowners quickly enough to fix what ails the economy. Voluntary modifications continue to be dwarfed by foreclosures. Our housing and economic crisis will not be repaired until we act to prevent unnecessary foreclosures,” Calhoun said.