It may not be such a bad idea to bailout millions homeowners who are in over their heads with mortgage debt.
Sure, many homeowners are to blame for their housing lust -- developed with a little boost from their friendly neighborhood real estate dealers -- but there's a bigger picture.
The economy is at stake.
Housing has long been considered an economic cornerstone. People buy homes. Homes gain value. People cash in on that value and buy stuff. As we all know, consumer spending is what really fuels the economy. Housing, after the dot com bust, carried the economy on its rooftop for years.
Unfortunately, the cycle is done. The trend is down. Home values are falling, faster and faster. Falling home prices are leaving consumers short of that extra home-based, economy-boosting, discretionary cash.
Mortgage lenders, who once poured mortgage money into the streets, now cover their assets and are reluctant to finance homes with falling values or to help the vast majority of homeowners facing falling fortunes.
Toss more foreclosures, short sales, auction sales and other homes with weakened values into an already over-supplied housing market and you get prices squeezed even more.
It's a vicious circle.
The year got off to a rousing start in January when for the first time in documented history, there were more homes sold at foreclosure auctions than condos and single-family homes on the open resale market, according to data mash from ForeclosureRadar.com and DataQuick.
Meanwhile, January home sales in the Golden State were in the tank and prices were whipped, down a whopping 22 percent from a year ago, according to the California Association of Realtors (CAR).
California will always have Paris and celebrity stars gone wild, the Steve Jobses and the industries of nerds, so-real vacation playlands that serve as backdrops for Hollywood movies, and its own produce to eat, but most markets won't be so lucky.
They may follow California into a market of doom. Coming out is going to be tough.
Right now, without some sort of bailout (and most Americans want one), millions of homeowners have nothing but an incentive to dump their homes on the market. Their mortgages are larger than the value of their homes.
Moody's Economy.com recently reported that one in 10 homeowners, nearly 9 million of them, have homes that aren't worth the balance on their mortgage.
The threat of more depressed value homes on the market recently prompted Mark Zandi, Economy.com's chief economist to forecast a home price drop of 20 percent from peak price levels in 2006.
He says each foreclosure on a neighborhood block reduces the value of all homes on that block by almost 1.5 percent.
U.S. home prices were already down nearly 9 percent by the final quarter of 2007, compared to the same period in 2006, according to the Standard & Poor's/Case-Shiller Home Price Index.
That's the steepest decline in the index's 20-year history.
An unscientific poll running for months now on the news-that-really-hits-home Deadline Newsroom blog is leaning toward a "later than 2010" recovery for the housing market.
Experts at the Center for American Progress say, even if the credit market improved, a freefall in home prices due to excess inventories is likely to push the housing market bottom way out beyond the horizon of 2009.
And that's just the bottom. A real recovery will take much longer.
Market conditions today are a lot like the homeowner who waits until the last minute to try to escape foreclosure.
If there isn't a bail out now, options leave the table and prolonged distress could force a really costly bailout years down the road.