In almost every part of the country, entire neighborhoods -- and in some cases, whole cities -- are underwater. They are not victims of natural disasters like Hurricanes Katrina and Sandy. They are drowning in debt, victims of Wall Street's reckless and predatory lending practices.
Even the conservator of Fannie Mae and Freddie Mac now says mortgage write-downs may make economic sense for the two housing finance giants. All of which begs the question: What if the industry had made these moves sooner?
Imagine how many people would have walked away from getting a subprime mortgage if the broker had told them, "The rate on this loan is 2% higher than you qualify for, because I
make more money that way."
We can't solve California's fiscal disaster without addressing the foreclosure crisis. It doesn't make sense to make severe cuts to state and local budgets only to allow Wall Street banks and their overpaid CEOs to drain billions more from our states.