There's actually an easier way to accomplish what you propose - since what you describe is what would ordinarily happen anyway, but for the credit rating.
If a family has their home foreclosed on, or they hand the keys to the bank, they need somewhere cheaper to live. The cheaper, vacant, foreclosed home is available. They would go and live in that home anyway, if they could get the credit on it.
So the easier way to accomplish what you suggested would be to relax credit rules for people with bad credit ratings....
Except....that's kind of how the mess started to begin with