If people are rightfully put out of their (bank’s) houses, what will the result be? Will the mortgage holders just spitefully burn down the house? NO. Will Warren Buffett buy them all to warehouse his money? Not likely.
Other people who can afford those house will buy them and move in. Net result: no change. People will be living in those houses. People who can afford them. Ans house prices will settle to real level rather than pretend level that bad lending practices created.
Is that really better though. The banks are taking 20%+ hit either way, so they can work with the current owner or take the hit with a new owner. I know each case is different and my understanding of this part of the economy is very basic as best, but it just seems that less damage is done somehow salvaging the current homeowners. Granted, each case is unique and some may not be salvageable.