Think there’s an easy way out of the underwater mortgage problem? Megan McArdle suggests otherwise., and she makes an all-too-convincing case. 

[T]here simply is never going to be what I think a lot of pundits are envisioning: a broad based, mandatory program in which banks are forced to “do what’s right for the country” and write down all that horrid underwater principal.  Legally it can’t be done except at enormous cost to the government.

Nevertheless, I suspect we’ll be hearing more about this issue come 2012.