I’d find it very interesting to see foreclosure data with “no recourse” states stripped out. In those states, most notably California, mortgagees can walk away from upside down houses, with no other consequence outside of a badly damaged credit score. With the ongoing reduction in cost of shelter, it’s rational, if somewhat dishonest, to bail on a losing proposition. Mortgagees in recourse states, on the other hand, are subject to deficiency judgment, and will be pursued for any cost remaining, between the price brought from a REO sale or at auction, and the remaining balance on the note. Wages can be garnished, tax refunds seized and etcetera, so it’s a debt that will follow you until it is paid.
If banks do not wish to participate, don't write the loan. Not one bank stood up and complained when these mortgages were being written - they were happy to take the fees and sell the mortgages off to Fannie or Freddie, taking their cut risk-free. And any rational banker KNEW that some of these loans were ridiculous.
Bring back debtor’s prisons and put the homeless in nice concentration camps.