Here is an idea. What if local churches and other such entities which represented a significant amount of cumulative wealth banded together to bail out local home owners in danger of foreclosure. I know of one example I heard of several years ago of an urban church financing members’ homes at a below market percentage. The low interest yielded on the loan over thirty years goes toward increasing the total pool of money available to finance more homes.
Churches are a community asset that tend to move-in and stay around for long periods of time. Even if members come and go, the church remains. They could be perfect entities to provide local care for those in need.
A local church has a better chance of knowing which families are good bets and which are not. They know which have contributed to the community and which are traveling through or unstable.
Churches may not represent millions of liquid assets, but if they can raise $500,000 for a building program to invest in their own building, why not do so for neighbors instead? Why should we homeowners only pay interest to the banks for the privilege of using their money? This idea made perfect sense back when a home loan was $20,000 and the bank was a truly local entity. Then the banker was just as likely as anyone to know who was a good bet and who was not. Now maybe local churches and other community organizations could step in and fill the gap.