May I humbly suggest that from here on out, bankruptcy courts use the Habitat For Humanity Mortgage Contract as the default writedown of any subprime loan. This is based on the fact that Habitat for Humanity works with subprime lenders, and has a historical 1% default rate (which no other bank can match).
The secret of their success? 0% interest. 500 hours required sweat equity in building the home. Payments limited to 30% of take-home income, no more.
Any takers in the big failing banks?