2008-02-09sfgate.com

In the future, Congress should require California to allow lenders to garnish wages of affluent borrowers who walk away from their homes. It's dishonest to have it both ways: (1) federal tax money backstops investor and bank losses when homeowners walk away from homes, and (2) California law allows homeowners to walk away without liability - even if they have money to pay. It's not that the California statute is bad alone; it's that it's wrong for federal taxes to guarantee huge loans without homeowners guaranteeing those loans too.

We agree with Olender. Unfortunately, governments right about now do not appear eager to induce the ire of millions of irate borrowers (many of whom were subject to predatory conditions) by clamping down on walking away. It is simply not possible to separate the deserving from the undeserving cases. So it appears the chips will fall where they may... it will be a holy mess regardless.


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