WASHINGTON - The housing crisis likely will last into 2010 until the credit market revives and government rescue programs have time to make an impact, the head of the Federal Deposit Insurance Corp. said yesterday.

FDIC Chairman Sheila Bair said regulators were bracing for a difficult year ahead as the economy staggers under the worst crisis since the 1930s and mounting job losses push multitudes of struggling home borrowers into default.

"We think we're going to have a tough year next year, and we're preparing for that," Bair said in an interview. "But we'll work through it.

"By 2010 we'll be seeing the light at the end of the tunnel," Bair said.

She spoke as industry reports showed the number of U.S. homeowners dragged into the housing crisis fell in November to the lowest level since June as new state laws lengthened the foreclosure process.

More than 259,000 homes nationwide received at least one foreclosure-related notice last month, down 7 percent from October, but 28 percent higher than a year ago, according to RealtyTrac.

The government's rescue plan includes hundreds of billions of dollars in direct federal investment in U.S. banks, as well as an FDIC program of three-year guarantees for as much as $1.4 trillion in new loans between banks.

The goal is to thaw the credit freeze gripping the economy and encourage banks to lend, Bair said.

But on action to provide struggling homeowners the ability to switch into affordable loans and help stanch the foreclosure wave, "we're still behind, very much behind, the curve," she added.

Debate on that issue has been intensifying as Democrats, including President-elect Barack Obama, insist that the government must use some of the $700 billion in bailout funds to halt rising foreclosures.

That also is the stance of Bair, an independent regulator and moderate Republican. *