The property should be sold in repossession for a fair price was established in the 13th Century

The concept of fair value has been established since the 13th century.  The Statute of Acton Burnell[1] of Edward the 1rst of England[2] decreed that when property[3] is sold for debt that it can be sold the property is delivered “at a reasonable price”.[4]  The Statute of Westminster of 1285 allowed that to pay an unpaid debt that up to half the debtors land could be transferred to the creditor “According to a reasonable price or extent [appraisal]”[5]

During an economic crisis, before foreclosing, the bank must offer the bond to the market or to the state at a 10% discount.

The state can then buy portion of bonds and bundle them into securitization traunches which it then guarantees and either sell them on or keep them until the market improves.

[1]  Statutes of the Realm (1225 -13) 9 I 53-54

[2] This Statute was agreed at a great council at Shrewsbury in 1283 near Wales to try a Lord (David) for breaking his oath of fealty see Hogue “The Origins of the Common Law” 1966  (Indianapolis: Liberty Fund) p 218

[3] Movables in this case, but the principle applies to immovable as well.

[4] Hogue “The Origins of the Common Law” 1966  (Indianapolis: Liberty Fund)

[5] Westminister II Chapter 18; Stat Realm, I 82