If it was mafia loan sharks behind our current lending mess eveyone would be for enforcing laws against the mafia. In this case, the predatory lending practices were by so-called legitmate banks and mortgage lending companies actively encouraged and underwritten by Greenspan's monetary policies accompanied by his and broader federal regulatory lack of oversight and lack of due diligence.
Their are several parties to this loan mess, and the "homeonwers" are only one of them. Their a scoundrels all around and I don't know why the banks should be the ones to come out "clean" at everyone else's expense. They are the one's who loanded money on the basis that houses were worth far more than the burst bubble market could bear, thereby financing the bubble in the first place. Their losses are as much their own fault as anyone elses and they were in a far better position to have the big picture than anyone else.
So, no tears for any of them.
Actually very few of the predatory and otherwise fraudulent mortgages were originated by banks. Many of them were SOLD to banks, accompanied by falsified documentation prepared by the originator. In some cases, developers, appraisers, real estate agents, and mortgage originators were conspiring together to inflate the values of homes and talk prospective buyers into believing they could afford the homes at the inflated prices. In one version of the scam, one or more of the conspirators would assure the buyer that that if the buyer had trouble making the payments during the first 6 months, the conspirator would make the payments. And the conspirators DID make the payments, for just that length of time, to create a paper trail showing the mortgage payments had been kept current for the required length of time to be sold to banks, Fannie Mae, etc. The massive fees and other profits that the conspirators made from closing these deals were plenty to cover 6 months of payments and still make a bundle.