Government policies address the issue of underwater mortgages, where homeowners owe more on their mortgage than the current value of their home, through various means, including:

1. **Loan Modification Programs:** Governments may implement loan modification programs that allow homeowners with underwater mortgages to modify the terms of their loans, such as reducing the principal balance or interest rate, to make their payments more affordable and prevent foreclosure.

2. **Refinance Programs:** Refinance programs may be introduced to help homeowners with underwater mortgages take advantage of lower interest rates or refinance into more affordable loans, even if they have little to no equity in their homes.

3. **Principal Reduction Programs:** Some government initiatives may offer principal reduction programs that directly reduce the amount owed on underwater mortgages to bring them in line with the current market value of the home.

4. **Short Sale Assistance:** Governments may provide assistance to homeowners seeking to sell their homes through a short sale, where the sale proceeds are less than the amount owed on the mortgage. This can help homeowners avoid foreclosure and minimize the impact on their credit.

5. **Foreclosure Prevention Counseling:** Counseling services may be offered to homeowners with underwater mortgages to help them explore their options, understand their rights, and navigate the foreclosure process if necessary.

6. **Stimulus and Economic Recovery Programs:** During economic downturns, governments may implement stimulus and economic recovery programs aimed at stabilizing the housing market and providing assistance to homeowners facing financial hardship, including those with underwater mortgages.

Overall, government policies addressing underwater mortgages aim to provide relief to struggling homeowners, stabilize the housing market, and prevent foreclosures. These policies may vary depending on the severity of the housing crisis and the specific needs of homeowners in affected areas.

I tried to find the information you're looking for, but I wasn't able to get the details on how the government oversees the secondary mortgage market. You might want to try searching online for more information on this topic. The government's role in regulating the secondary mortgage market is complex, and there are likely many resources available that can provide in-depth explanations and insights.