Buried toward the bottom of a gloomy report on home foreclosures is this:

The threat of so-called “mortgage walkers,” or homeowners who can afford their payments but decide not to pay, also increases as home values depreciate and equity diminishes. Banks and credit-rating agencies already are seeing early evidence of this.

Banks should persue these folks aggressively!
Really, someone thinking of moving that is in this situation probably shouldn’t be moving unless their new employer has a great relocation package. Their creditors should make sure that the potential perps know that they will have to pay out lapsed payments and any shortfall in equity.
There were quite a few folks in this situation in the early to mid ’90s. During that time I was in a negative equity position for a number of years but time cures many ills and even in the current market I am substantially positive.

During that same period I spent a brief stint as a realtor and sold a neighbors house. As part of the transaction his corporate relocation folks had to pick up nearly $100,000 in negative equity. Those times were not pleasant and a lot of people simply had to stay put until market values turned up.

We sure wouldn’t want 3000 Washington Mutual execs to feel short-changed for screwing up:

WaMu has revised its bonus plan for nearly 3,000 top executives so continuing damage from the subprime lending collapse won’t crimp their annual awards.
The struggling Seattle-based lender said in a regulatory filing Monday it will exclude the cost of soured real-estate loans and foreclosure expenses when it calculates net operating profit, the biggest component of executives’ 2008 bonuses.

Not only will they be excluding those real expenses but they want to make up for the losses on the back of their retail banking customers by including this new criteria in the bonus calculation:

Fees from retail banking — a new factor, weighted at 25 percent. Many banks including WaMu have been increasing fees for services such as ATM withdrawals by non-customers to compensate for losses in other areas.

These fees also include over-draft charges that hammer those account holders with the fewest resources.

Left i on the News provides some information and links on the growing food crisis driven greatly by government driven biofuel programs and then snarks:

Although you won’t find it in the article linked above, last night’s BBC World did mention the figure of “billions” of people who may be in serious trouble because of this crisis. Like so many other problems, this is one that capitalism – production for profit rather than need – can never solve.

Well, yes, like so many other problems something other than the government/corporate symbiosis that constitutes modern capitalism might solve a problem created by misguided government incentives.