Is there any surprise that this is happening? I always find it interesting that so many people talk about how it’s in the bank’s interest to do loan mods. They look at the situation as if doing a loan mod will not have repercussions on other loans.
It’s no surprise to me that banks are very reluctant to give principle modifications. Every one they grant undoubtedly triggers dozens more.
If you want to cure the current problem, you need to allow the foreclosures to happen. If you want to keep this problem from happening in the future, you better make sure that banks only make loans to people that can/will pay them back.
