Why can't the loans that are headed to foreclosure, go into foreclosure. The properties go up for auction, buyers pick them up for a more rational price than they were sold previously. The new owners rent to the former homeowners, possibly with rent to own opportunities? This way the housing stock is maintained but at a more realistic value, and the banks and lenders take the losses they knowingly risked, without losing everything?

IG, is your son saying credit and debit cards could become non-functional?