"At the end of the day, it is extremely important that the private sector has to provide capital and be the bigger player in industry than the government," says Sloane.

On a philosophical level, when it comes to homeownership -- and losses that have resulted from recklessness of the past -- it seems time for a reckoning to come.

Eric Donnelly, managing partner of Urban Commercial Mortgage, has a suggestion for the American dream that ignores a borrower's ability to repay a loan: "Homeownership is not for everybody and there's a real argument to be made for renting."

Democrats in Congress and the White House should take note of that when structuring their counterproposal. Too bad they probably won't.

-- Written by Lauren Tara LaCapra in New York.

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