Communities across New England and the nation are grappling with the souring of sub-prime mortgages and a jump in foreclosures. Many people took on sub-prime loans assuming home prices would keep rising and refinancing would be easy. Neither proved true.

The situation won't be easy to solve. However, one thing is clear: The time to act is now. There are steps that we can take right now - borrowers, lenders, public officials and regulators.

I encourage worried borrowers who hold high-rate loans to take one or more steps: Contact your loan servicer about a possible payment adjustment, consult a housing counseling agency about your options, or approach a responsible lender about refinancing. I also encourage lenders to reach out to borrowers, and take a fresh look at the state and federal programs that can help.

A number of borrowers with sub-prime mortgages may be able to refinance into a more affordable loan, because they had good credit histories and some home equity when they got their loan. As time goes by, however, declining home prices are eroding borrowers' equity, and some are experiencing financial difficulties or mounting debt as the economy slows. These forces complicate the picture, but also underline that the time to act is now.

One refinance option is the Mortgage Relief Fund (MortgageReliefFund.com) Five large banks joined forces to set up this program, with the encouragement of the Federal Reserve Bank of Boston, to reach out to borrowers with high-rate loans. The banks can help borrowers explore refinancing into a more-affordable loan - maybe a Federal Housing Authority loan, a state-guaranteed loan or a conventional loan. We believe a number of community banks will join the effort in the coming months.

For borrowers without easy access to the internet, the Mortgage Relief Fund banks can be contacted at the following numbers: Bank of America, 800-344-9403; Citizens Bank, 888-411-1145; Sovereign Bank, 800-288-6225; TD Banknorth, 800-281-0025 (x2315); and Webster Bank, 888-681-7788 in Connecticut and 800-635-9191 in Massachusetts or Rhode Island.

To qualify, borrowers' incomes must be verifiable and sufficient to support the payments. The borrower must have a history of generally making timely payments. The value of the home must support certain loan-to-value limits.

For borrowers who qualify, the savings can be substantial - hundreds of dollars a month, and thousands of dollars a year. For example, if the interest rate on a new FHA mortgage is 6 percent and the initial rate on a sub-prime mortgage was 8 percent, the monthly payment on a $200,000 loan would be about $268 less, for a yearly savings of over $3,200 (and more, had the original loan reset higher). One borrower already helped was at risk of losing her home. Her loan had adjusted from 7.4 percent to 8.9 percent, and was due to adjust again soon. Her new fixed-rate loan is saving her about $250 a month.

We know refinancing is not feasible for everyone. Even so, action now is important. Homeowners in dire situations should strive to make contact with the company servicing their loan. The servicer might be able to lower or freeze the interest rate or defer payments, to help avoid foreclosure. If a borrower can no longer afford the home, it still pays to contact the servicer, since working cooperatively can reduce legal fees and prevent further damage to one's credit history.

Borrowers can also consult the Homeownership Preservation Foundation, which has established a national hotline (888-995-HOPE). Calls are referred to counselors in the borrower's area who can help borrowers decide if continued homeownership is feasible, and suggest strategies and resources.

For the good of our neighbors, and our economy, it is in everyone's interest to explore solutions to this crisis like the Mortgage Relief Fund. For borrowers in sub-prime loans, as well as for lenders and public officials, a variety of steps are needed - and the time to act is now.

(Eric Rosengren is president and CEO of the Federal Reserve Bank of Boston.)