The administration didn't do very much, perhaps at the cost of a delayed recovery, according to some economists. But the possible options were political non-starters. As the Washington Post's Ezra Klein explains:
The administration believed that the best and fairest way to fix the housing system was to fix the economy. If people had jobs and tax cuts and unemployment insurance, they would be able to pay their mortgages and they would be able to buy new homes and that would take care of the housing problem. That did not take care of the problem- it did not come close to taking care of the problem. So one view is that the administration basically got the crisis backward. You couldn't fix the housing crisis by fixing the economy. You had to fix the economy by fixing the housing crisis. And the administration's housing policy wasn't anywhere near sufficient to do that.
Taxpayers don't mind a broad-based tax cut, or a program to rebuild bridges and roads, or even increased help for the unemployed. But hundreds of billions of dollars that go to the homeowners who got into mortgages they couldn't afford and stopped paying rather than to more responsible homeowners who scrimped and saved to keep up with their payments? That's a tough political sell. Doug Holtz-Eakin was the chief economic adviser to John McCain during the 2008 campaign and he proposed a widespread debt-forgiveness plan. The only problem? "No one liked that plan," he said. "In fact, they hated it. The politics on housing are hideous."