Perhaps the City of Boston could follow the footsteps outlined in Matt Taibbi's Rolling Stone article. The city would take underwater or to-be-foreclosed homes by eminent domain, paying the loan company the current market value of the home, while arranging a writedown of the previous mortgage, so that the residents can re-finance with the city, despite the banks, at the current, real value of the home. Then the city would sell the new mortgage on the mortgage market, I guess.
The Green-Rainbow Party is the Massachusetts affiliate of the Green Party of the United States (MA political designation "J"). It was founded in 2002 through the union of the Massachusetts Green Party and the Rainbow Coalition Party.