Judgment? What judgment?

Don't blame Roberta Englund of north Minneapolis or Julie Gugin on St. Paul's East Side for not cheering the Bush administration's rescue plan for Wall Street.

"I'm terribly disappointed," said Englund, executive director of the Folwell/Webber-Camden Neighborhood Council. "I guess there has to be an intervention. The banks and the mortgage holders, the financial folks, have proven they don't have very good judgment."

No kidding. The bailout plan calls for spending up to $700 billion to buy up the bad mortgage debts that have gummed up the global financial system.

Englund and Gugin know how mortgages are supposed to work. Gugin is a former computer-industry worker who spent eight years at Habitat for Humanity before moving in 2006 to the nonprofit Minnesota Homeownership Center, which this year will help thousands of homeowners try to hang onto their homes. The center also works with folks who are trying to qualify for their first mortgage. She also is an East Side homeowner in a neighborhood pockmarked by foreclosures.

'It's hard to watch'

"I'm not going to speak to whether the bailout is the right thing," she said. "I do know that the foreclosure crisis is having a horrible impact on families and neighborhoods and communities. It's hard to watch."

Englund estimates that about 600 houses and duplexes are vacant out of about 4,000 units in her north Minneapolis neighborhood, which saw some of the worst examples of house flipping, mortgage fraud and predatory lending in the state.

Englund could use millions for a bailout, including low-cost renovation money for responsible landlords and homeowners, demolition of houses that have been trashed and a program to hold vacant land responsibly until redevelopment can occur. Oh, and some community gardens and new trees would be nice, too.

"Where's the 'trickle-down' from this bailout for north Minneapolis?" Englund asked. "Is there no moral compass? We have to clean up the mess."

Bush administration regulators and the Federal Reserve failed to use their powers to halt the unsavory and illegal practices that infected the nation's mortgage industry. After a series of quick fixes earlier this year failed to stop the bleeding on Wall Street, Treasury Secretary Henry Paulson concluded last week that sweeping measures to eradicate the bad mortgage debt are necessary.

Paulson, who is now negotiating that bailout legislation with Congress, promises that no kingpins will emerge unscathed. Investment banking executives from Bear Stearns to Lehman Brothers have lost fortunes as their stocks collapsed. Federal prosecutors are in the hunt for bad guys. And you can expect some big civil penalties in the offing.

Glenn Wilson, the Minnesota commerce commissioner and a veteran of the mortgage industry, noted last week that mortgage programs operated by state and local nonprofits never had these problems. That's because people like Englund and Gugin kept their eyes on the ball and worked with clients to qualify them for appropriate types of mortgages.

The private-sector mortgage industry became too much of an adjustable-rate, pass-through scam where few players kept enough skin in the game to stay focused on doing the right thing. The fast-buck operators turned what should be a long-term commitment into a back-alley heist.

Wall Street and the debt-rating agencies played along. Millionaires were made. And lots of unsophisticated, working-class people who should have gone to Gugin's home-ownership preparation class for six months are homeless thanks to spending six hours with predatory mortgage brokers.

The pendulum will swing back. Englund knows folks prospecting the neighborhood, including a young couple who bought a very nice, $140,000 house across the alley from her on Oliver Avenue N.

Gugin said more people are coming to the Home Ownership Center's courses.

"People are returning to first-time home buyer products offered through reliable lenders such as Wells Fargo and U.S. Bank," she said. "They are safe products with fixed interest rates."