It's not every day you get some new terminology to decribe what a mess banks made in regards to the housing bubble.

If every upside down homeowner resorted to "jingle mail" (mailing the keys to the lender), the losses for the lenders could be staggering. Assuming a 15% total price decline, and a 50% average loss per mortgage, the losses for lenders and investors would be about $1 trillion. Assuming a 30% price decline, the losses would be over $2 trillion.

Not every upside down homeowner will use jingle mail, but if prices drop 30%, the losses for the lenders and investors might well be over $1 trillion (far in excess of the $70 to $80 billion in losses reported so far).

I can imagine that a whole bunch of people who bought homes in the last couple of years, seeing them now worth less than what they owe, taking this option out. Why not? Actually, I think upside down homeowners can use this leverage to negotiate better terms with the banks, forcing them to eat some significant losses.