Then why foreclose, if it is not the best option for the bank? Since it clearly is their best option, I'm not going to cry when they exercise their best option. It's not like they don't have teams of accountants making scores of actuarial tables to assess foreclosure risks so that they can plan for such eventualities. Just because they made stupid loans does not mean that I should be happy that they will not suffer the consequences of their own stupidity. Our nanny-government already meddles far too much in our lives. Making private contracts subject to government "do-over" calls is not a wise way to encourage a healthy and vibrant economy. THAT takes the will to watch bad decisions come to bad results... but sadly, few Americans have the stomach for that kind of thing anymore, and they are more than happy to allow government to let them feel like bad consequences are a thing of the past.
Because they aren't paying anything. You seriously think banks make money on foreclosures? Why do you think banks are writing off $10 billion dollars in loses left and right on these subprime loans?
Making private contracts subject to government "do-over" calls is not a wise way to encourage a healthy and vibrant economy.
The government is not involved. The government did not mandate anything. The government is not spending a dime or overseeing this. This is banks volunteering to do this because it is in their best interest. If you really understood how banks packaged these subprime loans and sold them to investors, you would have an idea why this was necessary. This was all done to cover the rear-ends of banks.