For years, defaulting homeowners who couldn't repay their mortgages have been portrayed as victims. That mentality is so pervasive, in fact, that when one of the two mortgage lenders of last resort had the audacity to show the smallest bit of backbone last week, it caused a huge controversy. For everyone who's worked hard to repay their debts and grown tired of propping up their less responsible neighbors, the news couldn't have been more welcome.

Fool me twice, shame on me
Last week, Fannie Mae (NYSE: FNM) decided that it had had enough of the "strategic default" phenomenon. In an attempt to dissuade homeowners from walking away from their delinquent mortgages, the lender announced that it would bar defaulting borrowers from getting additional Fannie Mae financing for seven years unless they can prove that they didn't have the capacity to pay, or they attempted to negotiate in good faith for a workout alternative in lieu of foreclosure.

In addition, Fannie Mae said that it would seek deficiency judgments where permitted against homeowners who strategically defaulted on their mortgages. This combination of actions is clearly meant to make people think twice before simply walking away from their homes.

Misplaced outrage
Predictably, opponents of the move focused on the damage the measure would do for troubled homeowners. One Reuters columnist argued that Fannie Mae "demonizes the victims of the housing bust" by "putting out press releases which talk airily and moralistically about people who walk away from their mortgages."

Yet is Fannie Mae really asking so much? From the response, you'd think that homeowners somehow have an inalienable right to any and all opportunities to stay in their homes, whether it requires lower monthly payments, interest rate reductions, or even outright writedowns of mortgage principal. Meanwhile, the theory goes, if homeowners decide to give up and walk away, Fannie and Freddie Mac (NYSE: FRE) shouldn't hesitate to enable Wells Fargo (NYSE: WFC), Bank of America (NYSE: BAC), and other former beneficiaries of the government's TARP largesse the same ability to give away more money to these homeowners when they try to buy another home -- leaving you with the bill, again.

Another housing bust?
The better argument against the move is the practical one: that by locking out strategic defaulters, that set of prospective future buyers disappears, which could further destabilize the housing market and push prices down further. In addition, without demand, new housing starts will continue to fall as they did in May, pressuring already-struggling Toll Brothers (NYSE: TOL), Lennar (NYSE: LEN), and Pulte Homes (NYSE: PHM). Those homebuilders have seen most of their gains from earlier this year, when the recovery looked more rigorous and promising, disappear. The situation is bad enough that even after a big boost from the homebuyer tax credit, smaller homebuilders are looking for direct government help.

In essence, what that boils down to is that while any one defaulting homeowner may not be significant, when you take them as a group, they're too important not to protect. In other words, they're collectively "too big to fail," and taxpayers should pay whatever price is necessary to protect them.

The real moral hazard
The idea that delinquent borrowers should benefit from their bad judgment runs against good sense. Already, laws in many states protect homeowners from bearing the full consequences of their bad decisions, leaving taxpayers like you and me on the hook. Fannie's proposal doesn't hurt anyone who is truly a victim, but rather focuses directly on those who sought to profit unfairly from the housing bust and are unwilling even to try to act in good faith with lenders.

As I see it, it's about time. Without some sort of consequences for their actions, there's nothing to stop these borrowers from doing exactly the same thing again. And having gotten away with it once, they're not likely to feel any qualms about it the second time around.

With the housing system already in shambles and causing economic chaos across the nation, the last thing it needs is a group of opportunistic borrowers taking advantage of attempts to help those who truly need it. Fannie's move is a small step, but at least it's a step in the right direction.

Think I'm way out of line? Let me have it in the comments below.

How will the housing industry fare in the second half of the year? Rick Munarriz answers that question and much more with his predictions for the rest of 2010.