Since when are the millions of people who aren't paying their mortgages "the good guys?" Plenty of responsible people in the same tough positions have notified their lenders, renegotiated their mortgages due to hardship, groomed their houses for sale or short sale, and made arrangements to move out. For the majority of people who did not do these things, and have simply continued to live in a house that they aren't paying for, and breaking contract, who cares that the lender robo-forecloses on them? The media wants us to believe that the banks are the crooks, don't believe the spin.
This is really a matter of contract law. If the property does not appraise for the value as stated in the loan documents the borrower can also claim fraud demanding the note be voided and all monies paid returned with interest. Most of these loan contracts are non-recourse with only the property collateralizes the debt. The banks have a right to foreclose for breach of contract through court proceedings as spelled out in the original signed docs and by statute. For many borrowers looking to minimize losses and suck out any remaining equity they simply stop paying the mortgage, taxes and stretch it out as long as they can. ie. a $200K note on a $250K home presently valued at $200K. If they save $2K a month and stretch it out 2 years they got all their equity out of the house. Even if the borrower has means and assets... The banks entered into the agreement on a non-recourse basis with a first position lien on the title. These banks have to pay assessments and taxes otherwise they will lose their position in the event of a tax sale. These property titles can also be encumbered by mechanics liens and a plethora of other schemes. These issues will plague us for the next 30 years as all Title insurance companies are soon to be on the hook. The low end is not where the trouble is.. its the mid and upper end housing where the buyer is savy and understands the suck out my equity by stalling game.