We need to help homeowners to kickstart an economic recovery, just as the government helped the automobile industry and the banks. The Administration should propose a program that works like this: If your house is worth $150,000 and your mortgage is $200,000, allow the house to be sold for $150,000, with $50,000 paid by the government and owed by the former homeowner to the government -- to be paid off over 20 years via an additional income tax assessment of $2500/yr, plus a small interest payment.
This gets a homeowner out of an impossible situation, maintains his credit rating and, because the money will eventually be paid back, is of small long-term cost to the government.