Progress report on government efforts to turn the housing market around

We have been in a housing depression for a few years now, and our federal government continues to do the most to get us out of here when it does nothing.  Unfortunately, government can't leave bad enough alone, and the brain-bound folks on the Potomac have been busy creating nothing but smoke and mirrors. 

The downturn and resulting foreclosure crisis has been addressed with programs designed, not to help stabilize prices and stop the bleeding, but instead to help banks keep caretakers in the property they will eventually repossess.  There are government incentives for loan modifications, often no more than a way to keep someone who can't afford to live in their home around for as long as it takes to get every last cent from them.  I think that part is called a trial modification.  There are short sale assistance programs that seem to do the exact opposite. 

The most recent brain fart from Washington smells like another exercise in creating a nation of renters.  There are proposals that distressed homeowners should be allowed to drain their 401k's to try to avoid foreclosure on their homes.  The incentive is that there should be no tax penalty for losing your life savings to the lender.  Apparently, they would not drain their life savings to save their homes without government incentives to do it.  Great way to assure that an eventual renter will have nothing for eternity.

Then there's dumb proposal two, allow underwater homeowners to refinance at lower rates.  This almost sounds good until you see the details.  First, homeowner must be up to date on payments, a very reasonable requirement.  Second, the bank has to own the loan.  If it is securitized, the loan can't be refinanced.  So, banks that hedged off all or part of the loans will assure that the higher interest will continue to be charged.  The proposed program will effectively penalize banks that kept loans in their portfolio.  Seems like the opposite of the QRM strategy and an incentive to securitize anything that banks are holding right now.  It is estimated that maybe 20% of loans have not been securitized. That means that eight of ten underwater homeowners will be ineligible for refinancing through nothing they can control.  Like I said, another dumb proposal.

These two proposals have one common thread besides their inherent stupidity.  Like almost everything that has been done by government, they do nothing to help the housing industry.   There have been no programs, proposed or implemented, that had more than an ill-contrived pretense of helping the housing industry recover from the crash.  Am I missing something?