Basic economics too much supply drives down the prices. Banks need to look at taking a small loss with the current owner of the mortgage instead of a large loss by foreclosing on the property. It has been our experience that the people who want to stay could afford the home if the interest rate was lowered. This would slow the rate of foreclosed homes hitting the market and perhaps keep the current home owner in the house perhaps the would banks lose less money in the long run.
Seems to us the ones really being hurt is the Home Owner and the Investor. The Banks the Server are the ones making a profit still today. They are charging the Investors, They are hanging onto the loans instead of the short sale options available, as long as the servers hang onto to them the more profit they make.
All the Best
Dave & Lisa