How have I learned my lesson?

I too have libertarian feelings. But you are dealing with 2 million families. That is a lot of voters with discontent in an election year. Least painful method is to burden the major costs to lenders, slowly enough that they are injured but not killed. The borrowers have been punished by loss of ownership anyway. Why walk over them some more? I am much more keen on seeing risk aversion in more sophisticated lenders than in lay borrowers. Nothing better than the festering wound of a mountain of REOs on their balance sheets.