We should take into consideration that when the bank in the US takes a write down of an asset, where does it come from. It has to come from current earnings, or retained earnings. While a consumer or home owner is taking the hit on the mortgage meltdown, where do you think the banks are getting it from? A house is financed for 100% of the $400,000 purchase price, for example, and it is now worth only say, $100,000. Yes the home owner takes a hit, but it is the bank that is going to take the $300,000 hit from their balance sheet. That money is gone and it is hard to make $300,000 back, with today's interest rates on deposit and, albeit, little amount is that is being paid on deposits. Yes the banks were a part of the problem, but who told them to lend to every one with a pulse? I think it was the federal government, who are in reality, each and every American. They elected the government. A lot of people got richer from the sale of their homes, a lot re-financed their homes for a life style, a lot of them were counting on the inflated housing prices to give them equity. The ball has many facets and there are as many tales about why these people are in trouble with their mortgages. One is that they often over buy a house, thinking they can afford the house as they get to deduct the interest paid on their mortgages. Talk about a false economy that can create.
In that the government (the people) made the problem then they should pay for it.