That, and to suggest that the people who bought houses over their heads should be required to wear the letters “SP” emblazoned upon their chests so society can readily identify them and refuse to interbreed.

It seems to me that the Feds should have aprogram where people can bring in their mortgages and, as long as the home is worth more than the (base) mortgage, the loan is refinanced by the current holder at a rate that will make their housing expenses <= 35% of their gross - or whatever the magic number is (either as a fixed or a fairly long term ARM). My understanding is that most fiscal people believe that is the point at which people can afford their mortgage payments (plus utilities, taxes, ins, etc.) Now the mortgage holders (banks) do not actually lose real money here - they just may make less (because 5% will get you less than 8%), but they significantly increase the odds that they actually get the return on their investment. And to make it really worth their while, the Feds could use this bailout money to pay the equivalent points for the reduction of the interest rate, thereby also infusing $ into the system. [So if the rate lowered from 8% to 5% on a $200K house, the bank would get $6K in points.] So now the bank gets a cash infusion for securing a more likely to happen return on their investment, albeit at a somewhat lower level. And this would be putting money back into the credit markets slightly more directly than that first gift of bailout cash did. And the family would at least stand a fighting chance of staying in their home.