No. Buyers default because the home value has dropped to say $50,000.
You paint it like the bank comes out ahead and then you say the bank got burned. Right in your post you are twisting and justifying the facts.
The bank did not buy a house. The bank offered a loan service to the customer who promised to pay back with interest. The customer expected the home to appreciate. It did not. So the customer defaults on the loan agreement and squats on the property for free until the paperwork can be completed to repossess and evict the now deadbeat squatter (no longer a customer but a holdup artist). The “customer” might just as well have gone in with a gun and robbed the bank. It is just as honest.
Whether the bank offered great loans or not is not the issue. The customer agreed to pay. The customer is not paying solely because the home value unexpectedly depreciated, their loan is for more than the current value, and they seize the opportunity to hang their own loss on the bank.
Tarring the reputation of the bank as some sort of justification is deplorable. It is also irrelevant. If the bank was so horrible why get a loan there?
Defaulting on a loan just to evade the consequences of your own bad investment is revolting.
No. Buyers default because the home value has dropped to say $50,000.
The banks were a major part of the housing bubble and got holding the bag with smart buyers.