You're talking about foreclosures absent the bursting of the housing bubble that mass forclosures would trigger. When all the people who suddenly entered the housing market, creating the artificial demand, are forced to exit the market supply will suddly skyrocket while demand disappears. Lenders will be sitting on properties that they cannot offload and that are rapidly losing value. Each property that cannot be sold represents an enormous amount of money that the lender has tied up in the property, but that isn't bringing in any income, and is actually sapping income as it depreciates. Every dollar that goes into a house is a dollar that the bank can't use. If the bank loans you $300,000 today and forcloses a year later and watches the house depreciate to $250,000 and still can't sell it, that's $300,000 they've already taken a $50,000 loss (minus your mortgage payments for a year), but also represents now $250,000 they have tied up in equity that is costing rather than making money for them. Multiply that by a few thousand homes and you're going to see some lenders in pretty sad shape.
Maybe it's not a bubble, but if it is it is not going to be good for lenders. And if it isn't, well, they're just lucky....it doesn't excuse their irresponsible lending practices. Again, irresponsible because it sets them up for collapse, not because they are failing to protect the poor innoccent borrower. My Fararri metaphor applies perfectly. The manager doesn't deserve to be fired because he allowed me to make a bad financial decision that will damage my credit and get my car reposessed. He deserves to get fired because he signed off on loaning me far more money than I could afford to pay back.