The very first case we studied in my first year contract law course at the University of Texas involved a contract dispute arising out of the famine in Greece during the Nazi occupation in World War Two.
A mother had borrowed a trifling amount of money at an impossibly high interest rate (but not against any usury laws) in order to buy some bread to feed her family. The food probably saved her and her children’s lives. The mother said the promissory note she signed should be voided because of the exorbitant interest rate. Most of the students in the class were recent college graduates having never held a real job in their lives. They immediately said the note should be unenforceable.
The professor was a bit older and wiser, and asked, “If they don’t enforce this contract, how likely do you think it will be, if another famine hits, that the mother and her kids can borrow money to buy food?”
Same’s true of these notes and mortgages being voided, and awarding houses to people that haven’t paid for them.
How likely will it be, if valid contracts are avoided on technicalities, that the next person wishing to borrow money to buy a house will find many folks willing to lend to him?
Everything has consequences. Which is something trial court judges should consider before they get too carried away with punishing mortgage companies for failing at some legal technicalities.