Isn't the purpose of government to protect its citizens when a more powerful entity acts against them?

Also why bother obtaining property and wealth when the Government positions itself as the taker of all things whenever it suits them best?

I agree. That's clearly not what is happening here, though.

For one thing, the people who have taken the mortgage out own at least some of the property, and secondly the banks that hold the mortgages are profiting form fraud (ie, the deliberate strategy of selling sub-prime mortgages to people who couldn't afford them). Finally, this isn't what suits [the government] best. It would suit the local government if the problem could be ignored, which is what other jurisdictions (including at the Federal level) are doing.

By definition of being underwater they own no equity of value. When a company goes bankrupt, i.e. when a company's equity value hits zero, i.e. when a company's assets are worth less than its liabilities, shareholders are wiped out. At that point they have no residual claim to the assets.

It doesn't have to be this way; for example in the event of a liquidation all parties with an equity interest could have money distributed to them in proportion to the interest the hold.

I'd rather see a court where the banks are ripped apart for their crimes, but for some reason this never happened.

From the mortgaged home-occupant point of view, the banks have all the power here. Government power is the only thing they fear, but government power is a fairly blunt stick - governments generally don't intervene in individual cases and have to attempt a systematic solution, and so far it has been very ineffective.

In this case the mere threat of government intervention that will actually help consumers may be enough to change bank policies (if not in Richmond, perhaps elsewhere). I see that as a positive thing, and one that will help correct a distortion in the market.

(Often on the basis of race - which is one of the things that makes all the people who blame the Community Reinvestment Act for the mortgage crisis really misguided. All the CRA did was ban redlining, a practice where banks excluded everyone in predominantly-black areas from prime mortgages even if they'd otherwise be eligible, leaving expensive subprime mortgages as their only option.)

Elected officials are representatives of the populace. "Government" is, then, is not some alien entity, but at least in principle, the voice of the people. The government is therefore not the taker of all things, but the giver of all things, and let me explain that:

The right to private property isn't a natural law, or even the natural form of human behavior. Human beings started out living in collective tribes. It's not that property was shared, but that there wasn't much property at all. Sure, I guess some men objected forcefully to others taking their women, but the transition from women to material property is certainly not an obvious one.

Only with the advent of agriculture humans started having anything resembling property at all, and it was their decision to allow property to be owned "privately". It was society, or "government" if you will, that created the notion of private property through a social contract in the first place.

So it is society, or government, that graciously allowed you to "own" anything, but that by no means implied that society could not place restriction on ownership. And if you didn't like the rules you were welcome to leave and spend your life away from society.

Sure, this arrangement is pretty much the only one that has worked so far, but there have been many revisions and will be many more. But the premise should not be that society infringes on private property, but that the meaning of private property is constantly re-created and negotiated by society.

It is dangerous to view it literally this way. To think that government and/or society is giving you things, assumes that they owned them to begin with. Government owns your rights, and then "graciously" allow you to exercise them? No.

Government exists to protect your rights. It's an important distinction. You rights to life, liberty, property, etc. are innate to you as a human being (the fact that others in the past have not had this view does not disprove this philosophy), and we created government and the notion of a rule of law to protect those rights.

Of course not all systems of government work this way, we call those that view themselves as the arbitrary "giver of all things" tyrannies.

Obviously, we need to take into account that now, unlike 10,000 years ago, people no longer have the option of leaving society completely, so they have little choice in the matter, and in order to restore some of that freedom, private property needs to be protected by law. But again, property is not a natural right; it's a social convention. That should be the premise.