Freezing rates will merely reduce the availability of money to lend. Rate = risk. High risk, high rate. Prove your worthiness, lower risk, refi at a better rate. It’s not rocket science!
So will foreclosing on the properties, wouldn’t it?
The banks are simply trying to minimize their losses. If deferring a scheduled rate increase means that they don’t have to foreclose in a down real estate market and they can continue to get the borrower to service the loan then the bank comes out ahead. That’s not rocket science either...