Banks are not making a lose on tracker mortgages - this is just banking PR spin. They are making a loss on the speculation games they played with their mortgage accounts which is not the same thing.
At the time when the vast majority (if not all) tracker mortgages were given out, the funding was available to the bank for the entire term of the mortgage at a rate less than the borrower pays - if the banks had stayed put and not speculated, they would still be making a healthy profit out of their existing tracker mortgages.
For example. Say a customer was given a tracker at ECB +1% for 25 year mortgage. The bank purchased the money at ECB + 0.6% locked in for 25 years and was due to make a profit of 0.4% per annum with zero risks. However, after having done this, the banks decided that they'd like to make even bigger profits and started trading the these contracts for shorter, more profitable funding arrangements which ultimately tanked.