Despite possible advantage to me as a potential homebuyer, I found myself appalled and annoyed at the proposed $15K giveaway in the guise of a "tax rebate" for homebuyers.  I'm against propping up prices this way.   But I thought about a way to do something similar, something which isn't a giveaway and which does improve liquidity (ease of buy/sell) in the home ownership market.  Make it easier to sell.   Here's the idea:

Who needs to sell?

Retiring or drowning, and downsizing (sell this, buy or rent that).
Moving up or sideways (sell this buy that).
Gamblers who got caught short. Little sympathy.
Estate sale. Little sympathy for the heirs.

There might be some liquidity value to helping people sell an underwater or marginal house to move to another house, and then transfer the benefit on the first house as negative equity on the second house. This way, if your job requires you to move, you are able to sell the first house, but you carry the extra burden you took over to the second house whether in the form of actual debt or as negative equity.  Without it, you would have to take a straight up large loss on the first house, making it harder to buy into the second house.

The government gives you a grant of up to say 15% of the mortgage which the bank accepts as part payment to close out your mortgage when you sell.  The second house gets a mortgage with a lien, or a partnership arrangement etc. of equal value to the 15%.  Government greases the wheels but doesn't spend any more money on the new house. If government holds equity, the second property is partially nationalized, with an option to buy out the government down the road. Otherwise the owner owes the excess money as debt, like a second mortgage, to the government.  Interest rates can be worked out.

There is no "tax rebate", rather the government invests (probably through State or Local functions) similar to "stock injection" for banks.  There is no significant moral hazard, and no propping up of the bubble.  Strict requirements on timing similar to existing RE transfer laws.

My thinking in October was limited to a program for people trying to stay in the house. This would extend that to make it transferable.  This won't solve all similar problems, but it might help some individuals and it should increase liquidity for houses underwater.