foreclosure bailouts

"Should the federal gov't bail out consumers at risk of foreclosure on their homes?"

It doesn't punish the government itself that much. They can just raise taxes, print more money, and still continue bad policies (other than not following/enforcing rules).

The biggest reason the government regulators weren't doing much is that there were federal mandates to give a quota of loans to underrepresented groups: usually poorer minorities who had bad credit. These were not people who 'got cocky', but did buy houses they couldn't afford (mostly because nobody put in plain English what their loans were). The victims were intended to benefit and so weren't protected. The "rules" were suspended because it looked like sound social engineering rather than bad credit/business decisions. Of course, the banks did exceed this by then spinning off these bad loans in other products, minimizing their risk by passing the buck. There are programs out there which provide education, budgeting, and loans to people with bad or little credit...but this was a much larger scale.

Speculators shouldn't be protected or bailed out, and those do account for a significant population of people who got screwed. But I'd have to wonder whether the government needs a bigger slap on the hand too for this somehow. Aside from that, I don't mind the plan either. I'd prefer not to see death spirals in neighborhoods and I'd prefer to see the banks make more bank-like decisions instead of playing a game of musical chairs with billions of dollars.