We keep hearing from business and the right that the market is self correcting. The market knows best. They now have an opportunity to show it in action. Loans were made to people who had no chance of illegitimately qualifying for the loan, so everyone in that chain failed with a fraudulent originator, derelict managers, and a derelict DOJ, much as with the savings and loans under Reagan.
A first step would be to enforce the original requirements, and any loan made to someone not qualifying be prosecuted, both perjury and fraud. Then I would enforce the words of the loan officer on the loan. An advisement to the mortgagee that has in good faith bought, kept up their home, and done their best to fulfill their obligation, that there would be no problem, should result in no problem, with a mortgagor keeping an interest rate where it is no problem, just like their claim.
Speculators, both sides would hurt, but the honest would suffer far less, and in the future, reality might have a better chance, with fraud less likely to skate. Lack of regulation did us harm, but to a far greater extent than with the savings and loans. Enough Real Regan Republicans; we are now a debtor nation.