[quote=SK in CV]….
And yes, I think the lenders should keep lending…. If I sent you a check for my net worth, I’d be as dumb as many of the lenders that made bad loans over the last 5 years…[/quote]

Either:

1. The lenders quit making dumb loans that allow less than 20% downpayments, or 30-40% in the areas that are still full of bubble air, and then cram down on the fully documented and justified hardship cases, or

2. The lenders continue lending at ridiculous levels of risk, with downpayments at levels that are much too low, in which case there should be no cramdowns, period.

We can’t have both cramdowns and a continuation of what led us to cramdowns.

Prices in vast swathes of Los Angeles are still way up in bubble territory, and lenders are still lending 80-100% of these prices, backed by the taxpayer. If we think that should continue, then we can’t turn around and say that the resulting risky loans are nonsensical and should be forgiven.