Banks mess up again

You must have heard that the big banks are putting a moratorium on foreclosures. They didn't do this out of the goodness of their hearts. They are doing it because they fear their records are so shabby that they will loose in court.
Taking a man's house is a serious business, and a decent court will demand more evidence than just a bank computer ticket saying the mortgage is in arrears. For openers the court demands that a responsible bank official review the paperwork and sign to attest it's accuracy. That's an antifraud measure. The responsible officials know that the judge will hang them if the paperwork is false, forged, altered, or missing. Sounds like the responsible bank officials, fearing to put their names on the line, found some gullible junior employee and had him/her sign the forms, thousands of them.
Now that the judges are wised up, the banks know that the paperwork won't fly. Next, comes some other issues. The bank needs to produce the original paper mortgage with the borrowers notarized signature. Can they do this? Or did they microfilm the mortgage and discard the original to save space? Like they do with my canceled checks. Did they sell the mortgage to Fannie or Freddie or GMAC or Merrill Lynch to turn into mortgage backed securities? What happened to the original during the sale? Can the bank prove to the court that they still own the mortgage after so many were sold?
What brought the mortgage paperwork issue to light at this inconvenient time? Could it be that bank record keeping has been shabby for years and the courts were accepting the shabby paperwork. And now that foreclosures are peaking one scrappy homeowner cried out "The emperor has no clothes"? And sure enough, once someone points out the problem, it is a problem.
So, give the banks one black mark for sloppy record keeping. Give them a second black mark for not having the brains to cut a deal with the homeowners. Foreclosure sales only recover a half of the loan value. Guy defaults on a $200K mortage, the bank will be lucky to recover $100K selling the house. If the banks had any brains, they would have cut a deal with the homeowner, drop his mortgage 25% and let him keep the house. That way the bank only looses 25%. Go to foreclosure and the bank looses 50%. What would an intelligent bank do?
How smart does one have to be to become a banker?