A credit score is a measurement of how well you manage credit, without regard to the inducements to take on debt.
I agree with you about the "bad lending practices," - offering loans to people at discounted rates below what their credit history would warrant.
However - the reason for credit reporting is so that the next entity looking to extend credit, even on stupid terms, knows whether you've been good at paying your bills on time.
While I am sure there were a lot of bad loans made people also have to take responsibility for their actions. I know there of plenty of people who were taken advantage of but there are just as many if not more who worked the system to their advantage.
I think it would be difficult to quantify or prove what a bad lending practice was and that this particular person was damaged by this and therefore should have their credit scored adjusted.
While there were perhaps predatory lenders, I often think the consumers were also equally to blame. People on all sides of the transactions were often overextended and new it was too good to be true, or should have known better.
It's time we all start taking responsibility for our actions and not blaming other people. That will just get us in trouble again with a false sense of security.
First, as already noted, credit scores are calculated by private entities. The government's not going to tell Experian, et al., to raise the credit scores of certain people by x number of points. Just won't happen.
Second, and more important, the borrowers lost their homes due to bad decisions on their parts. Mark, Mack, and the others have it right. Just because something's offered to you doesn't mean you have to take it. There were plenty of homeowners who resisted the siren song of "free money, credit to all, make a fortune." They made appropriate decisions and their credit scores reflect that. Others made poor decisions, and their credit scores reflect those poor decisions.