This is not true.- The banks couldn't do anything else because there was nobody to buy the homes
I was actively house hunting in 2012/13 with a lot of funds to deploy - 90th percentile of house prices at the time. The banks weren't generous but willing to lend to people with the earning capacity.
Saturday viewings weren't thronged but 10-20 potential buyers through the door every time.
Much of what was on the market seemed to be executor's sales. The real bottleneck was on the supply side.