alt Hacker NewsThese are my feelings too, but in the interests of compassion, I would suggest a return of some proportion of equity to (human, non-LLC, non-corporate, primary resident) buyers in cash, up to bank failure. Hopefully they can then buy another house at the presumably much lower prevailing market rate. Someone has to lose, let it be in order of "he who should have known what he was doing in making this catastrophe possible."
I mean, there are a few things here. Like if the bank want the house sold on the loan because the house value goes down even though the person with the loan is willing to continue servicing it - then that seems like an own goal for the bank.
There are a variety of circumstances that can be dreamt up for either side of the equation. And I have no compassion for lenders either.
As you say, maybe the mortgage/loan should be seen as a partnership of some degree between the parties so that the lender is less likely to take advantage.
But ultimately "he who should have known" is the person asking for money to buy XYZ thing. A person should be responsible for their actions.