Clearly this buyer took a gamble and lost. He should have know better. But some of the story does hit home. The part about having to send in the same paperwork 5 times to an unresponsive bank.
I think all the media attention to “loan modifications” is giving the gamblers a false hope. The banks are not modifying squat, and it is time that someone report honestly that you can forget any real help on mortgages. Take your losses and move on.