I don’t think that there’s any way an existing loan can be renegotiated with more lenient payment terms. It’s against regulations as far as a know. A new note has to be funded with the old note being paid-off, even if it’s with the same lender.

Imagine that prices are tanking and borrowers are making minimum payments. Their notes outstanding are increasing as the value of their houses are decreasing. If it continues on a while, borrowers may just walk and let the lenders have the collateral.