While national headlines report on bank rescues, people at the local level are dealing firsthand with the aftermath of foreclosure.
In some places, once the former owner moves out, the property is stripped of all valuables, especially copper gutters, downspouts, plumbing and wiring. In no time, the lender's security in the loan, the house, loses a huge percentage of its value.
Given the challenges of managing and maintaining vacant houses, maybe lenders would be better off allowing former owners to stay in their houses? This could be worked out on a lease/purchase or straight rental basis. The lender becomes landlord; the former owner becomes tenant, and pays rent instead of a mortgage payment.
Maybe it's a starting point for compromise? Foreclosed homeowners need a place to live. Vacant buildings are problematic. Rental income to the bank is better than zero income from a vacant house. And protecting the house from being stripped is better for the neighborhood.