if the government INSISTS on getting involved in this whole mess with bailouts and the like, then they should be helping the homeowners to eliminate date (thus granting more financial freedom in the middle classes) rather than give the money to the banks which perpetuated the mess to begin with. They will only use the money to continue their dubious practices.
Some people with underwater mortgages were legitimately taken advantage of by predator lenders. Others, I'm sure, were simply speculating and were left holding the bag when the bubble burst. I'm not entirely sure how you'd differentiate, but I believe it's probably possible, and I think those people who were taken advantage of should get some help. Those who were just making an investment that backfired, well-- you can't win 'em all.
I believe that the federal government does have some responsibility to assist homeowners with underwater mortgages in most cases. As long as the homeowner had demonstrated financial responsibility, where the mortgage is underwater through no direct fault of his own, the government should at least offer some form of assistance. After all, it was many of the federal government's actions that played a significant role in the economic collapse.
With the exception of homeowners that were deliberately cheated by unscrupulous lenders, the government should not interfere on the side of overburdened home buyers. People need to stop trying to live above their financial means. Factoring in the potential for job loss, medical expenses, and foreseeable expenses is part of the home buying process. Just because a lender says you can afford a mortgage of xx dollars a month, doesn't mean you can really afford that. Lenders do not factor in living expenses, children, new cars, vacations, etc. - that is the buyers job and the government should not have to intercede for people that cannot think ahead.