Perhaps, as you say, “The houses in question were never worth anything close to the price the banks and assesors quoted the home buyers.”
But the home buyers agreed to those prices when they signed on the dotted line.
Nobody made them do it.
To a point. The overvaluing of these homes caused every other home in that same market to be overvalued as well. Even in my podunk home town, for a while, homes were being advertised for less than a day and getting offers, often greater than the price asked. Even rental prices were getting out of hand.
And they agreed to it believing that the banks and assesors had not lied to them a bout the true worth of the property, but just in case ~ they wanted and got a clause allowing them to walk away if they discovered they had been lied to.
Funny how there are some people whining...because the buyers acted both prudently and responsibly ~ leaving the con men little recourse.
It's a contract, that allows this activity. Nobody made the banks do it either.