Most of the abuses of the mortgage industry and bank foreclosures result because the originator of the mortgage sold their interest in it to another investor who is almost never local. Because they are not local, they have little risk if they abuse the customer. There is no mechanism to minimize and correct abuses.
If the organization that originated the loan were local and had to keep and service the loan, they would run have to maintain good standing in the community. They would also be motivated to make choices that contributed positively to the local economy, such as avoiding large numbers of foreclosures by making good loans to begin with and working with the homeowners who come on hard times. In other words, there would be a self-correcting mechanism in place.
As long as contracts like mortgages can be sold/reassigned to an entity other than the one that originated it, the loan marketplace is not self-correcting.