That was before Federal bailouts were available. Companies had to figure out how to stay solvent all by themselves. Prudential knew they had used a good methodology when deciding who to make a mortgage loan to, so they knew those houses were in the hands of people who were in a jam not of their own creation. Leaving those people in the homes and working with them was a great solution for a number of reasons.
Now, banks know they put all sorts of bad loans out in order to meet Federal guidelines, so they can't be very selective when it's time to decide how to handle foreclosures. If they keep someone they know is and has been solid in the home like Prudential did, it just means they're setting themselves up for lawsuits for throwing out the people who are bums, were bums when lied to get the mortgage, and will be bums no matter what the economy is doing. I bet anyone reading here can think of a half dozen race hatred mongers that would lead the charge to sue any bank that tried to honestly and select which folks they could trust to remain in a home and which they couldn't.
Even when there are the sort of people managing a company these days as there were managing Prudential at that time, they're between a rock and a hard place just like they were when the Feds told them they had better write more high risk loans or they'd be investigated for being racist or homophobic or whatever else is fashionable on any given day.
If, on the other hand, the government were to try the approach Prudential used they'd screw it up with the same sort of quotas and unrealistic standards they applied to the banks and others in the first place. Anyone who starts to get back on their feet would bail because they wouldn't want to play the sort of games Federal agencies use to justify their jobs and explain why even more little Federal robots need hired. There would Federal inspections to see if you're maintaining your home, inspections of you spend a percentage of you income on your home that is within the guidelines, interviews to see if you have the proper loyalty toward your neighborhood, paperwork by the ton for anything that needed repair, and general intrusions into the lives of everyone in the program to make sure every homeowner wasn't a child abuser, did deal with their children according to educator approved guidelines, didn't smoked cigarettes in their Federal home, and of course, associated with a sufficiently diverse group of people, and so on.
In the era you refer to, Prudential was free to do the right thing for themselves and the people in the homes. These days, it’s illegal to use good judgment unless the Federal and State governments agree with what you think is good judgment and then make rules to ensure that your good judgment doesn’t interfere with their prerogatives as your master and the creators of a new society.
Regards