I agree with you on why the Gov’t is doing that ddm, but you should read Ramsey Su’s WSJ article on allowing foreclosures.
Nearly 40% of the country rents, and less than 10%, I believe still closer to 5% are in foreclosure.
Foreclosure is a painful but necessary solution. It will hurt in the short term but help in the long term: upside down families can startover, those priced out can buy a very affordable house.
Politicians are doing everything they can to avoid any pain at all. In doing so they push the inevitable back and only make it worse.