So the answers simple, don’t lend to people with bad credit. But then these same people complaining & calling the lenders scum will be yelling discrimination for not lending them money to purchase these houses. From a Bankers perspective the only choice we have from now on is not lend them a damn nickel. Reap what you sow.
Back in the 1980’s, there was pressure put on banks, to lend money to anyone. A friend’s brother, at that time a vice president with a local bank (now retired), was put in charge of the bank’s diversity loan program or whatever it was called, probably because he was of African-American descent. He said that at the time, he thought these giveaways would be a bad idea, but of course, he was overruled; so he did his job and probably too well. He says that even today, though the bank he worked for is still around, it is still recovering from those years of bad loans. Other banks were not so fortunate.