Here's How You Solve The Problem..

So the idea is for the city to confiscate private property. They will condemn these properties and then confiscate them. 

"This is not a bunch of Wall Street guys sitting around saying, 'How do we make money?'" he said. "This was a bunch of Wall Street guys sitting around saying, 'How do you solve this problem?'"

First of all NOBODY is doing any of this for free. These "not a bunch of Wall St. guys" are gonna make a killing I'm sure.  Second.. I will tell you how to solve the problem. LET THE FREE MARKET WORK.!

If these people bought more house than they can afford they will lose it and someone else will benefit from it. John bought his house for 500k. Now it's worth 350k. John can't make his payments and he can't sell it so he will lose it and the bank that gave him the loan will resell it for a lot less to Bob.

That's the market. It's not good for John but it's good for Bob. It's also good for learning your lesson. If you never feel any pain you never learn your lesson.