In order for this to happen, someone somewhere along the line has to submit a false statement to a court. Either knowingly false, or with reckless disregard for the truth.

That's perjury. It's a crime.

The motive, an assembly line system of foreclosures for the purpose of financial gain, is fairly obvious. The fact that the crime goes unprosecuted, and even unsanctioned, means that there is little incentive not to cast a wide net. No incentive to check for errors. Same name? Must be the right guy.

I largely agree with you, but I think both civil sanction and criminal sanction for perjury are appropriate and necessary in making certain this doesn't happen again. A major bank can absorb quite a few million dollar fines and still have its current system be more profitable than a system that does not engage in fraud, meaning deception for financial gain. Going to prison, though? That isn't something corporate officers can ever write off. That's why criminal sanction is so important.

It is also worth considering corporate dissolution. Corporations exist as artificial financial entities by the will of the courts. Whenever a corporation chooses to engage in systemic violation of the law because it feels the fines are going to be less than the profit, it should be dissolved. Its assets should be liquidated and the proceeds returned to the shareholders, likely at an enormous loss. New banks can form with new management that learns from the example.

There's a prospect to scare corporate management straight. Participate in a loss like that, and no one will ever hire you again.