Some economists believe banks should move borrowers into government-insured mortgages at lower rates. But many banks haven't been receptive, since they would then be forced to write off some of what the borrowers owe.
Some banks have begun to modify mortgages on their own, extending the length, or lowering the interest rate. But the banks won't reveal how many mortgages they've modified. Shiller said mortgage contracts should be more sophisticated to protect people from risk.
"We want a mortgage whose payment goes down in bad times and they go down automatically," Shiller said. "You don't have to go and fill out forms from a bank; you don't have to say anything. It's common sense, actually."
The Treasury Department has floated the idea of adopting a 4.5 percent mortgage rate for buyers. But a growing number of economists say it will take much more than that to reinvigorate the market.
Some suggest the Obama administration extend that 4.5 percent mortgage rate to homeowners on the brink and to the people who have been making their payments. In other words, everyone.
"You should extend the 4.5 percent mortgage rate to anyone in the U.S. who is current on the mortgage. These are heroes and heroines," said Jonathan Laing, senior editor for Barron's magazine. "They didn't game the system. I propose we buy the bad guys out, but let's reward the good people, too."
Laing argued that, even though lowering mortgage rates would cost $150 billion, that is far less than the hundreds of billions being spent in Washington and elsewhere to fix the economy. The Obama team is aware of the proposal and others like it, but has yet to offer details of its own.
But homeowners like the Hirschis are looking to Washington to act quickly, before their home -- their most valuable asset -- keeps depreciating in value.
"This was our first real home," Betty Hirschi said. "We still love our house. It's a beautiful home; we just wish it was worth what we paid for it."
Even homeowners who have done everything right are now paying a price.