New stats from Economy.com show that 1 in 6 homeowners owe more on their house than it's worth. On the positive side, those who are hurting are upside down in relatively small amounts. But that still leaves 7% or 8% who are frightfully upside down. Many of those will capitulate and send in the keys (aka jingle mail).

During last night's presidential debate, McCain made an unusual proclamation about a direct federal lending program with markdowns on loans to people who are upside down and a full payoff for the lender. Clark doesn't like this idea. The lenders should take a haircut. The whole concept of federal government taking over home debt on a loan-by-loan basis is a leap of faith into market intervention.

Clark is still struggling with how to best help individual homeowners and when we should help them. Those who bought in the last few years account for a big share of those who are upside down.

So maybe the best candidates for help instead would be those who have been in a house a near-lifetime -- those who got taken in a bad refinance deal after most of their home was paid off. But paying off a bank at 100 cents on the dollar, Clark can't hang with that. Why should the bank get off scot-free for having zero lending standards?