You seem to be blaming the borrowers who took these loans in good faith. Most haven't missed payments. The lenders appear to have gotten crazy with some of the products they've offered and that's causing a major problem.
If these rates go up and millions of homeowners can't keep pace, the lenders will take a huge bath and may even go under. That will seriously harm the economy and move us into a significant recession as investment capital gets scarce and businesses lay off workers.
The lenders, and you, do not benefit if they're foreclosing on homes that have devalued. They will have lost money. The buyers will have negative equity and many may be forced into bankruptcy. On a small scale that's always going to happen but we're looking at millions of incidents in a short time. A shock to the system.
It's inevitable that some people will lose their homes but if a small action can avoid a serious economic downturn, it's in the best interest of the the lenders, the borrowers and the nation generally to take such measures.
Personally, I'm concerned about the falling dollar. It has some benefits such as making US exports more attractive in open foreign markets and to foreign investment (a two-edged sword) but it does nothing for the American worker or businessman's buying power at a time when costs of goods and services are climbing.
Not an economist by training, I just don't like the idea of a capital crunch and a low dollar for keeping a roaring economy.
Japan suffers the same problem after having outsourced much of their low level production to Thailand etc. they need a lower yen to balance the books.
After having doen the same thing to our low level mfg, I don't see how we can avoid following Japan down the same path of asset deflation.
The problem is that commodities like oil and food are inflating while assets are deflating. That will squeeze American retail spending (the traditional engine of our growth) unless exports can pick up the slack as you suggest.