I do not believe in either party receiving windfall profits.
(1) If the occupants did not pay off the amount of the mortgage they entered into, with the agreed upon interest, then they should not get the house. Period. It should be foreclosed and sold.
(2) If the bank received TARP money to cover the bad loan, then any proceeds from selling the foreclosed house should go to the federal treasury.
forclosed by who?
the bank can prove they are the rightful party so they can’t forclose.
The rightful party can’t be found so there is nobody to pay money to.
If the rightful owner does not forclose within the statute of limitations, their claim is permanently time barred.