Sunk cost. They'll lose their equity stake in the property (as well as future income) if the bank forecloses on the property because the landlords aren't making mortgage payments.
Do the banks want to be in the situation of being landlords (even temporarily) of a huge number of tenants who are not or cannot pay rent? Doubtful. Does that mean they're a little less likely to foreclose on a rental property when there are lots of small landlords in this situation? Probably. Would I want to gamble a rental property on a banks reluctance to foreclose owing to the widespread nature of the problem? Absolutely not.
It honestly blows my mind that we didn't do this. It would have still been a mess, but at least in my mind a more manageable mess with less total harm.
Which of those two groups (landlords vs banks & debt holding funds) pays the most to lobbyists and campaign contributions to all parties? Sorry to be cynical but how can we not be so until it's properly cleaned up?
