Good article in NY Times about the Phoenix real estate market. Apparently, there are numerous investors, many out of state, who are buying Phoenix properties and renting them back to the previous owners. Often times, they rent to the troubled owners at a lower price than their mortgage was originally.
It shows that left to its own devices the market finds ways to work. Rather than spending billions on a program that helps a handful of homeowners, the market naturally finds ways to function. The new owners have positive cash flow while the previous owners get a more affordable payment. On top of that, the new owners hope to sell back to the previous owners at a later date. This is a win-win.