I applaud Sheila Bair, chairman of the Federal Deposit Insurance Corp., for telling The Wall Street Journal that the government's bailout efforts aren't doing enough to help homeowners.

She's right.

I was thinking about the reasoning behind not helping homeowners, which seems to be the moral hazard argument. That if we help the bad borrowers, who knew they couldn't afford their homes, that we are making it penalty-free to engage in bad, risky, damaging behavior. Borrow money for whatever, and you won't even need a get out of jail free card.

There's another way to think of it. We are bailing out banks but not homeowners. So they get the Get of Jail Free cards? We don't seem to be worried about moral hazard among financial institutions for what reason exactly? Are we assuming they don't behave badly?

Here's my response on the homeowner front:

Not long ago, many thousands of honest workers in the mortgage industry had the expertise it takes to pick a good borrower from a bad one. They spent their days evaluating and verifying loan applications, making judgments on whether to approve them.

That stopped at some point. A few years ago, when I went to refinance my mortgage, the approval came from software on a bank officer's screen. No one had to be spoken to. Paperwork wasn't checked.

Compare that to the first time I went to get a mortgage.

That was a huge ordeal, because our income was not verifiable. My husband was an attorney. When he won a case, he had money. When he did not, we did not. We had up and down income.

I wrote a huge explanation statement for our mortgage broker. I had to explain, too, all the flaws on our credit report that came from being young, with kids, and in debt. We got a loan, but at a high rate of interest.

None of that was required later. Just poof on the screen, your credit score is good enough.

I'm glad it was. But I was prepared, with a briefcase full of papers, to make my case. No one asked.

The expertise to separate out borrowers, I'm going to guess, has not evaporated.

This body of knowledge seems to have just been shoved aside. In its place are some stupid lending models that relied on the pseudo-science of a number, a credit score, as the great predictor.

I know they're stupid. Look how they turned out.