Noble as this idea sounds, all it's going to do is prolong the correction. The housing correction will not end until the price of houses returns to market levels. Since most houses are purchased by working Americans, and real wages in this country have been stagnant since 2001, and 1999 marked the beginning of irruptive growth in home prices
we have to go back to around 1998 to get an idea of where the baseline should be. As you can see, we still have a ways to go, but if the government stays out of the way and doesn't try to inject more money into the demand side of the equation, the imbalance could be rectified by the first or second quarter of 2010. Prices would then be nearly a third lower than they are today, and buyers would return to the market--and not need NINJA loans and other gimmicks to afford a home.
Asset depreciation is a key, necessary (though painful for some) part of any business cycle. Assets must be marked down for demand to return.