It's not neutral if you've borrowed to buy the home...
If you're in negative or reduced equity your mortgage costs can increase dramatically when you refinance. This alone can easily cripple a large % of the population and tank the consumer economy
Why would you refinance if you're underwater? Wouldn't you walk away from the property in most cases?
Of course that doesn't eliminate the economic impact. It just shifts it elsewhere.
An decent case can probably be made for the government to take on such loans and offer some scheme to forgive the difference if certain criteria are met.
If you're in negative or reduced equity your mortgage costs can increase dramatically when you refinance. This alone can easily cripple a large % of the population and tank the consumer economy